Hitachi UK Pension Scheme agrees £275m buy-in with L&G

The Hitachi UK Pension Scheme has agreed a £275m buy-in with Legal & General (L&G) Assurance Society.

The deal covers the scheme’s remaining uninsured deferred members and retirees, following its first buy-in transaction with Scottish Widows in 2018.

L&G stated that the scheme trustee was able to obtain a high degree of transaction certainty and take advantage of favourable pricing conditions and market capacity by locking the transaction price to the assets of the scheme.

The scheme trustee was advised on the deal by Aon and received legal advice from Pinsent Masons, while Macfarlanes provided legal advice to L&G.

Commenting on the buy-in, Ross Trustees trustee director and Hitachi UK Pension Scheme chair of the trustee, Jo Myerson, said: “Securing members' benefits is the ultimate objective for all trustees.

“We worked with two strong insurers to meet this objective for the scheme and were able to take advantage of favourable market pricing due to effective decision-making achieved as a sole corporate trustee.”

The deal completes the scheme’s phased buy-in journey in under three years, ahead of its initial completion target of 10 years.

Aon principal consultant, Michael Walker, noted the quick completion was possible due to “strong asset performance, favourable insurance pricing, good preparation and nimble decision making by both the trustee and the companies”.

L&G Retirement Institutional pricing and execution director, UK PRT, Gavin Smith, added: “We are pleased to have established this relationship with the Hitachi trustees and helped them secure their members’ long-term financial security.

“This buy-in, in particular, demonstrates our ability to insure pension schemes with a high proportion of deferred members, showing that pensions de-risking isn’t just the preserve of mature pension schemes.”

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