Deutsche Bank pension scheme agrees £570m buy-in with L&G

Legal & General (L&G) Assurance Society has agreed a £570m pensioner buy-in deal with a Deutsche Bank pension scheme, representing the “first step” in the scheme’s de-risking strategy.

The Deutsche Bank (UK) Pension Scheme, which is sponsored by a subsidiary of Deutsche Bank AG, currently has assets under management of around £4.5bn and a funding surplus.

It highlighted the agreement as the first step in its de-risking strategy of reaching full insurance over the medium term, with the broader aim of increasing the security of members’ benefits and reducing risks for the scheme and the bank.

The transaction was completed under an 'umbrella contract', which will also allow for future transactions with L&G to be completed quickly on pre-agreed terms when favourable pricing opportunities arise.

Longevity de-risking advice was provided to the trustee by LCP, which also worked with the trustee and bank when considering the de-risking options, including the agreed phased buy-in approach.

Legal advice was provided to the trustee by CMS, which also worked alongside LCP on the execution of the initial transaction.

Aon acted as scheme actuary and investment adviser, with Slaughter and May in place as ongoing legal adviser, whilst L&G received legal advice from Eversheds Sutherland.

Deutsche Bank AG head of pensions and benefits, Jeremy Sowden, stated that the transaction will also enable Deutsche Bank to hedge a "material portion" of the liabilities of scheme, confirming that the bank will work "closely" with the trustee board to evaluate future de-risking opportunities.

He continued: "We have a very strong working relationship with the trustee board and this transaction represents a continuation of that productive partnership.

“It is part of the ongoing journey to reduce risk in relation to our defined benefit (DB) pension obligations, benefitting the scheme members, the trustee board and the bank.

"A number of metrics and objectives were jointly agreed by the bank and the trustee board at the outset and this transaction delivers on those.”

Deutsche Bank (UK) Pension Scheme Trustee Board chair, Michael Wrobel, added: “We are very pleased to conclude this first buy-in.

“It is a significant step on our de-risking journey and the excellent outcome with L&G reflects the expertise and collaborative approach of our advisers and our close working relationship with the bank. It establishes a strong platform for future de-risking of the scheme.”

Commenting on the transaction, L&G Retirement Institutional director, Aysha Patel, added: “We’re very pleased to have completed this initial transaction with the trustee of the Deutsche Bank (UK) pension scheme.

“The appointment of Legal & General Investment Management as the scheme’s LDI manager and this subsequent buy-in highlights our expertise in assisting schemes at all stages of their de-risking journey.

“We look forward to continuing our relationship with the trustee and bank and providing additional security to their pension scheme members.”

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