UK insurer Legal & General Group plc (L&G) has announced two pension risk transfer (PRT) transactions with IHS Markit, London–based global information provider.
The deals include a UK transaction for £37.8 million ($46.7 million), covering around 150 members, and a US transaction for $97.2 million (£78.4 million), covering around 1,200 members.
The pension schemes covered are IHS (Global) Ltd. Pension and Life Assurance Scheme in the UK and IHS Retirement Income Plan in the US.
Willis Towers Watson led the advice on both transactions, with Sackers and Blake Morgan providing legal advice to the Trustees of the IHS (Global) Ltd. Pension and Life Assurance Scheme in the UK.
“We are delighted to have been able to work with IHS Markit and the Trustees to agree an exciting first for our team – a globally coordinated transaction to simultaneously insure pension liabilities in both the UK and the US,” said Laura Mason, CEO of Legal & General Retirement Institutional.
“Legal & General is uniquely placed to offer global market-leading pension risk transfer services. This announcement demonstrates our ability to work seamlessly across both markets at the same time,” Mason continued.
“First and foremost, we are currently focused on supporting our existing customers during these uncertain times. We are, however, continuing to see strong demand from pension schemes looking to de-risk and we have the team – and systems – in place to continue delivering for both existing and new clients.”
George Palms, President of Legal & General Retirement America, also commented: “We are proud to be working alongside our UK colleagues and IHS Markit on our first cross-country deal, sharing expertise and resources to deliver a coordinated transaction.”
“This deal demonstrates our unique offering, with experts in the US and UK working to meet the continued client demand we’re observing.”
Damien Teisseire, Vice President – Group Reward Director, IHS Markit, further stated: “By partnering with Legal & General, we were able to achieve an important objective for the company and our scheme members by de-risking and simplifying our global pensions arrangements in two simultaneous transactions.”
“This agreement provides long-term security for our pension members of the UK “IHS (Global) Ltd. Pension and Life Assurance Scheme” and the US “IHS Retirement Income Plan”, securing their benefits with a well-established insurer,” Teisseire went on. “The collaborative and dynamic approach in addition to strong expertise from all parties ensured that both transactions were completed safely and efficiently.”
Stafford Napier, Chair of Trustees, IHS (Global) Ltd. Pension and Life Assurance Scheme, added: “This transaction is a key step in our plans to de-risk the provision of pension benefits for our members in the UK. We had been discussing the opportunities for de-risking with our sponsoring employer for a number of years. The agreement with Legal & General delivers an excellent outcome by securing benefits with a major and well-established insurer.”
“With the support of the Company, our advisers and Legal & General we were able to complete the transaction efficiently and on time even in the face of the challenging financial circumstances surrounding the coronavirus emergency.”
Furthermore, Greg Robertson, Transactions Specialist, Willis Towers Watson, stated: “We were delighted to support the Trustees and IHS Markit to de-risk its global pension obligations with this innovative transaction. Through our global team of pension de-risking experts, we were able to identify and capitalise on the synergies and efficiencies of executing the UK and US transactions in tandem with Legal & General.”
“Recent market volatility, and in particular widened credit spreads, has led to some particularly attractive pricing in the UK bulk annuity market.”
And finally, Ed Root, Managing Director, Willis Towers Watson – US, said: “We were excited to be the strategic advisor on the US portion of this US/UK transaction, collaborating closely with our UK colleagues. With WTW’s expertise in both the US and UK de-risking market, we were able to transact on this unique opportunity.”
“It was also a result of our close partnership with Legal & General US to be able to complete the transaction smoothly and on schedule in the recent volatile market.”