The Lehman Brothers Pension Scheme has secured a landmark £675m bulk annuity deal with Rothesay Life.

The deal, which is the largest to-date in 2015, will put an end to the ‘assessment period’ the scheme has been under for six years since its insolvency in 2008.

All pensioner benefits were restricted during this period, however all members’ will now be paid their pensions in full as of July 2015 when the assessment period officially ends. This will also include back payments.

Under the terms of the bulk annuity policy, Rothesay Life will assume liability for the full benefits payable to all scheme members who have DB entitlements. The pension payments will be made via the scheme initially, but in due course Rothesay Life will take over responsibility for paying benefits to members directly when the bulk annuity converts to a full buy-out.

Trustee chairman Peter Gamester said since the insolvency of Lehman Brothers in 2008, the trustees have been “striving to secure the pension benefits promised to members of the scheme”.

“The agreement with Rothesay Life achieves this goal as it enables members’ defined benefit entitlements to be paid in full. On behalf of the trustees, I would like to thank the trustees’ advisers together with LBIE and their advisers and Rothesay Life for their support and assistance in achieving this extremely successful outcome.”

PwC advised LBIE and led the transaction with legal advice from Travers Smith and Wragge Lawrence Graham & Co and actuarial advice was provided to the trustees by Aon Hewitt.

Rothesay Life chair Keith Satchell said this is the company’s sixth such transaction in under twelve months and it expects the trend to continue throughout 2015 as companies look to settle pension liabilities in full.

Travers Smith pensions partner Susie Daykin added: “The insolvency of Lehman Brothers left the scheme with a significant funding deficit. The ultimate goal for the trustees has been to secure all members' benefits. That has now been achieved. It is an excellent outcome for the scheme and its members.”

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