The Flour Milling and Baking Research Association Pension and Assurance Scheme has agreed a £10m Assured Payment Policy (APP) transaction with Legal & General (L&G).

The scheme’s sponsoring employer, Campden BRI, is a specialist advisory and research firm for the food and drink industry.

This is the scheme’s first transaction with L&G, although the scheme is an existing L&G client, having partnered with Legal & General Investment Management (LGIM) for more than 24 years.

The deal is L&G’s sixth APP transaction, and its first for a premium of less than £100m.

First Actuarial advised the trustees on the transaction, with Gowling WLG providing the trustees with legal advice.

The scheme sponsor was provided with advice by Little & Company.

L&G’s APP de-risking solution enables a pension scheme to partner with an insurer on the way to buy-in or buyout, and selectively insure some of the pension risks associated with their scheme members.

L&G said the product locks down investment risk by providing protection against changes in asset yields, interest rates and inflation.

“Using the APP, the trustees were able to precisely hedge the bulk of the risks involved in running the scheme, increasing the security of the members’ benefits on attractive terms,” commented Dalriada Trustees independent trustee, Tiziana Perrella.

“It was pleasing to see L&G engaging in depth with the trustees in respect of a smaller transaction – proving that the insurance market remains open to well-prepared schemes with the right governance.”

L&G client solutions director, Beatrice Male, added: “Today’s announcement demonstrates how our flexible APP solution can work for schemes and sponsoring companies of any size, helping them on their de-risking journey.

“The use of APP allows smaller schemes to leverage L&G’s financial strength and investment expertise to manage their investment-related risks. We are delighted to have agreed this transaction and look forward to building on our partnership.”

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