NGN Pension Scheme agrees £385m buy-in with L&G

The Northern Gas Networks (NGN) Pension Scheme has agreed a £385m buy-in transaction with Legal & General (L&G), securing the pension benefits of more than 600 retirees.

The scheme, which is for employees and former employees of gas distributor NGN, was established in 2005 and has now covered the benefits of around two-thirds of its members following this first buy-in policy.

It is an existing client of L&G, with L&G Investment Management having managed a proportion of the scheme’s assets since the scheme was established.

L&G said that by being prepared, and able to move quickly, the trustee and NGN were able to take advantage of favourable market conditions to establish the buy-in, adding that its price lock during negotiations for the legal agreement mean the trustee had “a high degree of price and execution certainty prior to completion of the transaction”.

Aon also assisted in the transaction, having acted as the broker.

NGN Pension Scheme trustee chair, Catherine Edmondson, said: “I am delighted that we have been able to take this important step to reduce risk in the scheme and increase member security. Thank you to the trustee, NGN and our advisers for all of their hard work which allowed us to move quickly when the opportunity arose to secure an attractive transaction.”

L&G Retirement Institutional director, Rachel Cutts, commented: “We are delighted to have completed this transaction, which provides further financial security to the members of the NGN Pension Scheme.

“This transaction demonstrates that by having a clear objective and flexible timescales, trustees can move quickly and secure their members’ benefits when favourable pricing is available. It builds on the L&G Group’s existing relationship with the scheme and we look forward to continuing to work with the Scheme in the coming years.”

NGN finance director, David Waite, commented: “This transaction demonstrates the initiatives and efforts which continue to be undertaken by NGN to manage our commitment to the scheme, balancing the interests of our customers, shareholders and scheme members.”

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