Pension benefits for 12,500 former Thomas Cook Group workers are to be supported via a £900 million agreement with Aviva.
The deal with the insurer is expected to result in a better outcome for the vast majority of Thomas Cook pension plan members than they may have expected following the collapse of the travel giant in 2019.
Aviva announced that it will insure the defined benefit pension liabilities for more than 12,500 members, providing pension benefits “at or in excess” of compensation levels within the statutory Pension Protection Fund (PPF).
“No member will see any reduction in benefits,” Aviva said in a statement issued on Thursday (May 5).
Aviva head of bulk purchase origination Jamie Cole said: “We’re delighted to support the trustees of the Thomas Cook pension plan with their objectives.
“This transaction is an important step as it provides security for all members and an uplift in benefits for many.
“The trustees’ ambition is to complete the move to buy-out as soon as possible and we look forward to welcoming the plan members to Aviva once this is complete.”
Steve Southern, director of scheme trustees Vidett, formerly 2020 Pension Services, said: “This transaction will eventually see members receive benefits either at or, for many members, with an increase above PPF compensation levels.
“We’re pleased to share this positive news with members, who we know have had a difficult time over the last few years following the unfortunate liquidation of Thomas Cook.
“The PPF provides a valuable safety net and a significant level of protection but many members will now receive higher benefits than they might have expected because of the transaction with Aviva.
“Members can take comfort their benefits will be looked after by one of the UK’s leading insurance, wealth and retirement businesses. The trustees are pleased with this development and are very grateful to their advisers and the PPF for their help and commitment throughout this process.”
PPF relationship manager Dan Collins added: “We recognise that the last few years have been difficult for Thomas Cook scheme members so we are really pleased that the plan has now secured this buy-in, ensuring improved pension benefits for the majority of members.
“Our role is to support the members of the schemes we protect and we want to assure Thomas Cook scheme members of our continued support as this transition period develops.
“We’d like to thank the trustees and their advisors for working closely with us to achieve this positive outcome.”