Aberdeen Group plc has agreed to take over as sponsoring employer of the £1.2bn Stagecoach Group pension scheme, it emerged on Thursday, in a landmark 'run-on' deal that would see the bus operator sever ties with its large defined benefit plan while members benefitted from enhanced payments and inflation protection.
The scheme, covering around 22,000 members, would continue operating rather than pursuing an insurance buyout.
Aberdeen would assume responsibility for funding and asset management, using the fund's surplus and investment platform to allocate capital into so-called productive assets including infrastructure, private credit and real estate.
The structure would allow Aberdeen to receive a minority share of any future surplus generated, with the bulk earmarked for members under strict safeguards designed to protect the scheme's long-term financial strength.
Members would receive an immediate pension uplift of about 1.5%, worth more than £50m, alongside improved inflation caps and the prospect of further increases tied to the scheme's investment performance.
The agreement built on Aberdeen's decision earlier this year to adopt a run-on model for its own £2.6bn pension scheme, reflecting a growing trend among well-funded defined benefit plans to remain open in pursuit of better member outcomes.
Trustee chair John Hamilton said the surplus and long-term growth potential created an opportunity to deliver "better inflation protection and higher pensions" under secure arrangements.
Aberdeen chief executive Jason Windsor said the deal would "deliver significant value" for members and expand the firm's asset base, adding that the structure aligns with government efforts to direct pension capital into the wider economy.
Stagecoach chief financial officer Bruce Dingwall said the transaction gave the company "a clean break" from its pension liabilities and supported its plan to simplify the business.
At 1214 GMT, shares in Aberdeen Group were down 1.09% at 200.6p.
Reporting by Josh White for Sharecast.com.