PRIVACY
Retail & Consumer

Boots strikes £4.8bn pension deal with Legal & General

Companies say deal affecting 53,000 members is biggest of its kind

Boots' head office in Beeston, Nottingham(Image: FREELANCE )

Nottingham-based pharmacy chain Boots has secured a deal to move 53,000 members in its pension scheme to Legal & General (L&G) in what the companies said is the biggest deal of its kind. The £4.8 billion buy-in will leave it up to L&G to pay members’ pensions directly to them, winding up the old Boots pension scheme, it said.

The company said it explored “a range” of options and this is “the best way to safeguard members’ benefit against market uncertainty, improved life expectancies and other risks”.

Boots will bring forward around £170 million of payments into the scheme it had already committed to and add a further £500 million, it said.

Its parent company, the Walgreens Boots Alliance, had previously agreed to guarantee the scheme. This agreement has been terminated and replaced with a smaller, temporary guarantee.

The process of moving the members to L&G will take up to two years, the business said. L&G will then shoulder most of the scheme’s economic risk.

Boots said this will reduce its exposure but also make members’ pensions safer.

Alan Baker, chairman of trustees at the Boots Pension Scheme, said: “This agreement with Legal & General gives added protection to our members’ long-term benefits by removing market uncertainty and other financial exposures.

“We welcome the additional payment from Boots, in addition to the sum it has already committed.