The John Townsend Trust Pension and Assurance Scheme (the Scheme) is expected to secure a buy-out next year having agreed a £30m PPF+ buy-in policy with insurer Legal & General (L&G).
The deal completed on 1 November 2021. The buy-in secures the liabilities of around 280 Scheme members to receive benefits at or above PPF levels of compensation.
The Scheme entered a PPF assessment period on 7 December 2015 when the John Townsend Trust entered administration. The John Townsend Trust had previously operated the Royal School for Deaf Children in Margate which had provided education, training, care, therapy, medical support and residential care for deaf children and young people.
Today’s announcement marks a significant milestone in progressing the Scheme wind up following the charity’s insolvency. A significant amount of work has been undertaken by FRP Advisory (the charity’s liquidator) and Open Trustees (the Scheme trustee) to achieve the best return possible for the Scheme. This includes the Scheme receiving the proceeds from the sale of the School buildings to Kent County Council. This buy-in policy should ultimately result in a better outcome for members than they might otherwise have been expecting.
Whilst all members will continue to receive their current PPF levels of compensation, the exact outcome for each member will not be known until the buy-out occurs. This is expected to happen towards the end of 2022, as further work is required before the Scheme can be fully transferred to L&G.
Open Trustees has been the trustee of the Scheme since the charity’s insolvency. Open Trustees is an independent entity but is wholly owned by international law firm, Osborne Clarke LLP. Open Trustees was advised by Barnett Waddingham LLP and Gowling LLP.
Jonathan Hazlett, Managing Director of Open Trustees said:
“We are delighted to have entered into this PPF+ buy-in policy with L&G. The insurance market is extremely busy at the current time and it can be very challenging to secure member benefits for smaller schemes. Notwithstanding this, L&G have offered us the opportunity to ensure that Scheme members receive benefits greater than what they would have received from the PPF. It has been a long process getting to this point as we negotiated all of the difficulties associated with the charity’s insolvency and, in particular, realising our interest in the School buildings. Whilst the PPF provides a valuable safety net and a significant level of protection, many members will now receive higher benefits than they might otherwise have expected had the Scheme entered the PPF.”
Simon Bramwell, Lead adviser to the Trustees and Principal at Barnett Waddingham added:
“Getting the best possible result for members has been at the forefront of this project and it’s a testament to the efforts of Open Trustees and L&G that we’ve achieved a fantastic outcome for a small buy-in in a very busy marketplace. The key to getting transactions like this done is clear: it’s about thorough and comprehensive preparation. This isn’t necessarily quick or simple to accomplish, but the preparatory work done by the Scheme has been incredibly beneficial in achieving the buy-in efficiently and in a manner that has maximised member outcomes.”
Adrian Somerfield, Director at Legal & General Retirement Institutional, said:
“Being able to help pension schemes whose sponsors have become insolvent is extremely rewarding and we are delighted to have helped the Trustees secure a transaction which provides long-term security to the Scheme’s members. This transaction is a great demonstration of how we can assist pension schemes exit PPF assessment and move to buyout with an insurance company.”
Any Scheme member seeking further information should contact Barnett Waddingham at JohnTownsendTrust@barnett-waddingham.co.uk
Media enquiries regarding the Scheme should be made to:
Chris Bond: Chris.Bond@osborneclarke.com / Telephone: 0207 105 7886
Media enquiries regarding L&G should be made to:
Margrit Williams: Margrit.Williams@landg.com / Telephone: 07384 452353