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L&G completes £650mn buy-in with the 3i Group Pension Plan

27th May 2020 - Author: Luke Gallin

Legal & General (L&G) has continued its partnership with the 3i Group Pension Plan, completing a £650 million buy-in with the Trustees of the Plan.

Legal_&_GeneralThe latest agreement provides a policy which matches the benefits of roughly 280 pensioners and 570 deferred members.

This deal follows on from the pensioner buy-ins undertaken by the Trustees with Pension Insurance Corporation in 2017 and L&G in 2019, and means that the Plan is now fully insured through buy-in policies held as assets of the Plan.

L&G notes that this final buy-in has been completed without reliance on 3i Group for any additional contribution. The pair have had a relationship for more than 15 years, with Legal & General Investment Management Limited providing investment support to the Plan since 2004.

“We are delighted to have continued our partnership with the 3i Group Pension Plan and help complete the final step of its de-risking journey, providing a solution that ensures the long-term benefits promised to its members are fully secured.

“The successful conclusion of this transaction demonstrates the resilience and continued growth of the bulk annuity market and our sustained activity across all levels of transactions,” said Laura Mason, Chief Executive Officer (CEO) of L&G Retirement Institutional.

For this transaction, the Trustees were advised by LCP, Linklaters and Lincoln Pensions and have consulted with 3i Group throughout the process. 3i Group was advised by Mercer and Slaughter and May. Legal advice was provided to L&G by Macfarlanes.

Carol Woodley, Chair of Trustees, said: “This transaction is a significant step forward in providing a more certain and secure solution for members’ future benefits and removes significant risks in the Plan that would otherwise be difficult to hedge. Achieving this level of security is especially valuable in the current economic climate and we are delighted that, with the support of our advisers, we have been able to take this step sooner than previously anticipated.”

Principal at Mercer, Richard Ratcliffe, added: “We are very pleased to have helped steer the transaction to the successful conclusion of a final buy-in, securing all the remaining risks in the 3i pension plan. We had to manoeuvre through challenging market conditions, but through good joint working with the trustees and their advisors and ultimately with L&G we were able to gain a very advantageous price for 3i.”

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