BSPS II secures two buy-ins with L&G

The second British Steel Pension Scheme (BSPS II) has completed two buy-ins with Legal & General (L&G), covering just under 30 per cent of liabilities.

The scheme’s News Brief publication for members showed that the trustee completed the first buy-in at the end of 2021 and that it covered around 5 per cent of liabilities.

A news update from the scheme on 27 May also revealed that the trustee transacted a second deal with L&G, under which around 25 per cent of liabilities were insured.

BSPS II noted that the transactions do not impact the entitlements or security of benefits of any member or group of members.

It added that the overall objective of the scheme was to reach full funding on a buyout basis.

In the News Brief, B.S. Pension Fund Trustee Limited chairman, Keith Greenfield, said: “Over time (as the scheme matures), the BSPS funding level is expected to improve further and ultimately reach 103 per cent on the buyout basis.

“If and when that happens, benefits are expected to be secured with one or more insurance companies, and the 3 per cent surplus will be used to increase members’ benefits in accordance with the provisions agreed when the new BSPS was established.

“Achieving the funding level to trigger this additional payment to members and secure their benefits remains the key priority for the trustee.”

The scheme’s latest actuarial valuation showed that the scheme had a surplus of £492m at the end of March 2021, down from £668m three years prior.

Due this better-than-expected surplus, around 50,000 scheme members received a shared one-off payment of £58m.

It had assets of £10,333m and liabilities of £9,841m, and a funding level of 105 per cent.

The scheme actuary has estimated that the assets of the scheme would have met 94.5 per cent of the buyout cost on 31 March 2021, up from 90.1 per cent as at 31 March 2018.

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