Cornish Mutual pension scheme agrees £11m buyout with L&G

Legal & General Assurance Society (L&G) agreed an £11m buyout transaction in November 2021 with the Cornish Mutual Assurance Company Limited Staff Pension Scheme.

The deal will secure the benefits of over 70 pension scheme members involved in the rural farming community.

Although the buyout was agreed towards the end of last year, it was only recently transacted as "favourable pricing arose".

Cornish Mutual is an existing client of L&G, having appointed L&G Investment Management (LGIM) as its asset manager in 2015.

L&G said it invests the premiums from the pension risk transfer transactions it agrees into ‘economically and socially useful assets’, such as housing, transport and infrastructure.

The funds are pooled together, allowing pension schemes to contribute towards green, sustainable investments.

The deal was completed using 'Pathway', a streamlined bulk annuity service developed by Eversheds Sutherland, Aon and Dalriada Trustees, which has now been used to support across transactions involving aggregate premiums in excess of £1bn.

Eversheds Sutherland, Aon and Dalriada each maintained a collaborative relationship with L&G throughout the buyout process.

L&G Retirement Institutional director, Julian Hobday, commented: “We are a whole of market provider, helping pension schemes of all sizes to de-risk and bring further security for their members.

“As a result of strong and professional collaboration, the buyout was effectively transacted when favourable pricing arose.

“We look forward to welcoming our new policyholders to L&G after the completion of the buyout.”

Dalriada Trustees developed and implemented an appropriate de-risking strategy, in collaboration with its advisers, to achieve the buyout transaction.

Dalriada Trustees professional trustee, Tiziana Perrella, commented: “This deal is a testament to how crucial a solid governance process is for successful transactions.

“We worked throughout the process in a collaborative way with both our advisers and L&G and we’re pleased to have agreed a transaction which results in greater security for the scheme benefits and much reduced the risk for the scheme and its sponsor.

“Transactions such as these evidence that great pricing is available within the bulk annuity market schemes for all sizes, if appropriate preparation has been done in advance.”

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