Legal and General has reportedly held talks with the British Steel Pension Scheme over a £15bn buyout of the scheme.

According to the Sunday Times, industry sources have said the insurance company has approached the trustee about taking over some, or all, of the liabilities. It said L&G is one of a number of institutions that have discussed a possible deal for the scheme.

An industry source told the Sunday Times that Tata could pay the insurer to take on liabilities, or it could be done a on “nil-premium” basis, with no payment. L&G could put its own capital at risk and would probably offer to cap any profit it makes on the deal.

However, it reported that any deal is dependent on Tata being able to split from the scheme. The company is in the process of agreeing a regulated apportionment arrangement with The Pensions Regulator. Tata Steel’s annual report, published earlier this month, revealed that the terms of the arrangement have been agreed and include a £550m payment from Tata to the scheme.

Tata has agreed that following an RAA, it will sponsor a new scheme, which will be offered as a voluntary option to existing members of the BSPS, as an alternative to the Pension Protection Fund (PPF). It will have lower future annual increases than the BSPS but would be better than PPF benefits and would “pose significantly less risk” for TSUK.

The DB scheme closed to future accrual in March 2017 following a consultation with members and trade unions.

“At Legal & General, we have connections with most of the defined benefit pension schemes in the UK and are providing relevant products and services to them. However, a buyout of the BSPS is not something we are actively working on at this time,” an L&G spokesperson said.

The BSPS is yet to respond to a request for comment.

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