LONDON - Hays (LON:HAYS) plc, a global specialist recruitment firm, has announced the completion of a significant de-risking step for its UK defined benefit pension scheme. The trustee of the Hays Pension Scheme has secured a £370 million bulk annuity policy with Pension Insurance Corporation plc (PIC), effectively insuring all the scheme's remaining benefit obligations.
This move follows a prior purchase of a bulk annuity policy from Canada Life in August 2018 for £270.6 million. With the addition of the new PIC policy, the company has taken the final step to fully insuring its UK pension obligations, which were closed to future accrual since June 30, 2012.
The transaction has led to the cessation of the Group's annual deficit funding contribution of £18.2 million, starting from the transaction date. Additionally, a one-time upfront cash contribution of £12.6 million has been made, with an anticipated further £6 million in expenses expected through to the final scheme buy-out and wind-up.
James Hilton, Chief Financial Officer of Hays, expressed satisfaction with the completion of the full buy-in, highlighting the elimination of pension-related balance sheet volatility and a materially positive impact on the Group's free cash flow from FY26. The improved cash generation is set to support future investment and returns to shareholders.
Sean Burnard, Chair of Trustees of the Hays Pension Scheme, also commented on the success of the buy-in, noting the achievement of securing the pensions for all members and praising the good project management that led to favorable contractual terms.
The Hays Pension Scheme's last formal actuarial valuation as of June 30, 2021, revealed a deficit of £192.1 million. With the completion of the buy-in, the company aims to move towards a full buy-out and winding-up of the scheme, which would remove it from the Group's balance sheet.
The information for this article is based on a press release statement from Hays plc.
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