Legal & General finalises £230m buy-in with Howden Group Pension Plan

Legal & General (L&G) has completed a £230m buy-in for all of the pensioner and deferred members of the Howden Group Pension Plan.

The scheme, in the Colfax Corporation group, has insured £230m in liabilities, covering nearly 2,000 members in total.

This deal follows a previous £250m transaction at the end of 2017 between L&G and another UK based pension scheme in the Colfax Corporation group.

L&G will now begin working with the scheme’s trustees and their advisers to transfer responsibility for paying members’ benefits, which will allow the pension plan to complete its buyout.

Commenting on the deal, Howden Group Pension Plan chairman of the trustees, Crawford McLean said: “The trustees are delighted to have been able to provide our members with the long-term assurance this transaction affords.

“We have worked closely with the company over the past few years to improve the plan’s funding position to be fully funded. This has enabled us to steadily reduce the plan’s exposure to uncertain asset returns.

“Insuring benefits for all members was the next logical step in this process and also removes the Plan’s exposure to longevity risk.”

Mercer acted as adviser to the trustees, while legal advice was provided to L&G by Clifford Chance and to the trustees by Brodies.

Mercer bulk annuity specialist and lead adviser to the trustees, Neil Rogers added: “Given the plan’s complicated benefit structure, considerable preparation was key to delivering this major milestone in the trustees’ long-term risk reduction strategy. We are pleased that many months of close collaboration by all involved have now paid off.”

L&G Retirement Institutional UK pensions risk transfer managing director, Chris DeMarco concluded: “Through a close collaborative relationship with the trustees and their advisers, we were able to deliver a solution which mirrored some of the plan’s more complex details, whilst providing the reassurance of the strength, experience and client service capabilities of L&G.

“We look forward to continuing our work with the trustees in the future.”

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