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Legal & General completes £930mn pension buy-in with Tate & Lyle

19th September 2019 - Author: Matt Sheehan

Legal & General Assurance Society Limited has announced the completion of a £930 million full buy-in for the members of the Tate & Lyle Pension Scheme.

Legal_&_GeneralTate & Lyle, a global provider of solutions and ingredients for food, beverage and industrial markets, previously entered a buy-in deal with Legal & General in 2012 for £350 million.

With this latest transaction, all members of the scheme will now by covered by the insurer, for a total value of approximately £1.2 billion.

The deal covers around 4,800 members, which, in addition to the 2012 transaction, means around 6,700 members are now covered by Legal & General in total.

Legal advice was provided to Legal & General by Macfarlanes, while the Trustees of the pension scheme were advised by LCP and Linklaters.

“We are delighted to have partnered with the Tate & Lyle Pension Scheme Trustees over the years to help them secure their members’ pensions and reduce the scheme risk,” said Laura Mason, CEO at Legal & General Retirement Institutional.

Legal & General believes that the transaction will support Tate & Lyle as it focuses on running its business, while ensuring that the long-term benefits promised to its pension scheme members are fulfilled.

“It also allows us to reinvest these assets into important areas of the UK economy,” Mason added, “such as affordable housing, renewable energy and transport, benefitting our cities, future generations, the wider economy and society as a whole.”

Michael Chatterton, Managing Director, Law Debenture Pension Trust Corporation PLC and Chair of Trustees, Tate & Lyle Pension Scheme, also commented: “This is great news for Scheme members. We never imagined only a couple of years ago that there would be such an opportunity on the horizon.”

He continued: “It is a fantastic conclusion to the derisking plan that LCP helped us agree 6 years ago with the Company and provides a blueprint for other schemes working towards full insurance.”

“This transaction is a good outcome for our UK scheme members, the Company and our shareholders,” remarked Imran Nawaz, CFO at Tate & Lyle.

“We have supported the Scheme over many decades and made significant cash contributions to remedy a deficit that has existed between the Scheme’s assets and liabilities,” Nawaz explained.

“That funding, combined with excellent stewardship by the Scheme’s trustees, has resulted in a positive situation whereby the Scheme can now be de-risked for the benefit of members and the Company.”

Finally, Clive Wellsteed, Partner at LCP, stated: “We helped the Trustees put in place a long-term de-risking plan shortly after their initial buy-in in 2012.  After identifying that the scheme could be within touching distance of full insurance in early 2019, well ahead of schedule, we worked closely with the Trustees and Company to navigate a hugely busy market and lock in the position with Legal & General.

“It is transactions like this that are providing unstoppable momentum in the buy-in and buy-out market with over £30bn of deals since this time last year. We expect a flurry of transactions to follow in Tate & Lyle’s footsteps over the next few months.”

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