Some 9,000 BHS staff will receive all the benefits from their new pension scheme after a deal covering £800m of liabilities.
Members of the BHS2 pension scheme will receive 100 per cent of their benefits following a buyout by the Pensions Insurance Corporation (PIC).
But the 9,000 members will receive less than they would have done from the original BHS pension scheme.
Last year 19,000 BHS staff were given the options of transferring from their original pension to the BHS2 scheme or transfer to the Pension Protection Fund. Those with smaller pension pots were given the choice of making a lump sum cash withdrawal.
Of these people, around 9,000 chose to transfer to the new BHS2 scheme.
The trustee of the BHS2 scheme said that it had approached other insurers to buyout the scheme but decided to strike a deal with PIC as it offered them flexibility.
Chris Martin, executive chairman of Independent Trustee Services, said: "We approached other insurers about the buyout but chose to go with PIC as it was a better fit for us and allowed us to have flexibility.
"When the BHS2 scheme was set up last year, it was understood that it would run in a fairy healthy state until a buyout of the benefits took place. Earlier this year we thought it was appropriate to test how well we were placed in the market to undergo a buyout and we began discussions with PIC."
Members of the BHS2 scheme will automatically become PIC policyholders and their pensions will be fully covered.
The buyout comes at a time of uncertainty surrounding the future of House of Fraser’s pension schemes.
Commenting on House of Fraser’s schemes, Uzma Nazir, chief actuary of PIC, said: "We would look at going into a similar situation with House of Fraser.
"But for now it is being left with the regulator until a decision can be made. We’ve seen recently that House of Fraser has more than enough money to fund the schemes and that it is unlikely to go into PPF."
rosie.quigley@ft.com
