The T&N Retirement Benefits Scheme (1989) has entered into a bulk annuity contract with Legal & General worth £1.1bn.

The scheme has been in a Pension Protection Fund (PPF) assessment period since 2006, but because the scheme’s financial strength exceeds the threshold below which the PPF would automatically step in, the trustee must by law prepare to wind up the scheme outside the PPF.

Legal & General has been working exclusively with the trustee and its advisers since April 2011 and said that members will see no immediate change in the way in which their pension payments are made, and that they will receive timely updates on any changes to the administration of the scheme.

Mercer Limited advised the trustee on the transaction, with Allen & Overy LLP providing legal advice to the trustee.

Tim Culverhouse, managing director at Alexander Forbes Trustee Services Limited and sole trustee of the scheme, said: “The trustee, Legal & General and their advisers have worked hard to make this transaction achievable, given the legal requirement to prepare to wind up the scheme outside the PPF. As a result, I hope it will be possible to apply a small one-off uplift to members’ annual pensions in due course.

“The scheme’s financial position is such that it remains unable to pay members’ full original pensions. I regret that there is no real prospect that the scheme could ever have sufficient assets in the future to provide members with a larger pension than Legal & General will provide.”

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