L&G completes 8 pension risk transfers in March

Legal & General (L&G) announced that its global pension risk transfer business has secured £261m of pensioners’ benefits across eight transactions in March.

The deals, which cover pension schemes from the US and UK, range in size from around £2.2m to £80m and include three transactions that were all signed on 27 March.

Comparatively, L&G completed 31 bulk annuity deals in 2019, the majority of which were valued at between £10m and £100m, according to data released by Willis Towers Watson earlier in March.

L&G said the deals completed in March demonstrated a resilience in the bulk annuity market, noting that well-prepared schemes were particularly able to take advantage of good pricing opportunities available.

L&G Retirement Institutional managing director of UK pension risk transfer, Chris DeMarco, said: “Amidst a challenging environment and great uncertainty, today’s announcement demonstrates that despite the significant disruption we are still able to provide security to pension scheme members through risk transfer transactions.

“Recent history demonstrates that periods of market disruption may provide opportunities for schemes to de-risk their schemes. The sharp widening of credit spreads, combined with the strong appreciation in the value of gilts many schemes are holding, has improved buy-in and buyout pricing."

EY LLP pensions partner, Iain Brown, said: “Despite the economic uncertainty created by Covid-19 and recent market volatility, we have witnessed resilience in the bulk annuity market with pricing holding up and actually improving. We are still seeing schemes keen to undertake bulk annuity transactions.”

L&G retirement America president, George Palms, commented that Covid-19 posed “obvious business continuity and client service challenges”, but added that the “market in the US continues to be active”.

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