L&G agrees £650m buy-in with 3i scheme
The 3i Group Pension Plan has agreed a £650m buy-in with Legal & General (L&G), insuring the remaining benefits within the scheme.
It is the second buy-in with the insurer since the scheme began using Legal & General Investment Management in 2004 and covers the entitlements of around 280 pensioners and 570 deferred members.
A £95m buy-in was agreed with L&G last year, following on from a £200m buy-in with Pension Insurance Corporation in 2017. No additional sponsor support was required for the latest buy-in.
Trustee chairwoman Carol Woodley 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."
L&G Retirement Institutional chief executive Laura Mason added: "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 scheme was advised by Lane Clark & Peacock, Linklaters and Lincoln Pensions, while the sponsor was advised by Mercer and Slaughter & May. Legal advice was also provided by Macfarlanes to L&G.
Mercer principal Richard Ratcliffe said: "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 advisers, and ultimately with L&G, we were able to gain a very advantageous price for 3i."
Macfarlanes insurance partner Andrew Barton added: "We are delighted to have advised L&G once again with this significant transaction. It showcases the growth of the bulk annuity market, which continues despite the current economic conditions, as well as our expertise on high-value pension risk transfer transactions."
Around £7.6bn of bulk annuities have so far been announced this year, with L&G securing the benefits for around £1.8bn of UK scheme members.
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