The Siemens Benefits Scheme has agreed a £530m buy-in with Legal & General (L&G), insuring the benefits of more than 2,300 pensioner members.
The scheme has now agreed an umbrella contract with the insurer, allowing future bulk annuity transactions to be completed in an efficient and timely manner when market conditions are appropriate.
It follows a £1.3bn buy-in with Pension Insurance Corporation in 2018, which covered the benefits of around 6,000 members.
Trustee chairwoman Joanna Matthews said: "I am delighted that we have been able to complete another key step in the trustee's de-risking journey. Through careful planning, we were able to overcome the logistical and investment challenges posed by Covid-19 and complete this transaction at this time on very favourable terms. This is a fantastic outcome and I would like to thank all involved in the process."
Siemens head of pensions John Smith added: "This is another major milestone for the Siemens Benefits Scheme. I am pleased L&G were able to offer us competitive terms for this transaction, allowing us to continue to build on the long-standing relationship we have with them here in the UK."
The deal is L&G's sixth announced bulk annuity transaction this year, following a £650m buy-in with 3i Group Pension Plan, a £100m buy-in for the Countrywide Farmers Retirement Benefits Scheme, and a £70m buy-in with the ICI Pension Fund.
The insurer has completed around £3.7bn of buy-ins and a buyouts in 2020 against a market somewhat dampened by Covid-19 challenges. A total of £13.4bn of bulk annuity transactions have so far been confirmed across the market.
L&G Retirement Institutional pricing and execution director Gavin Smith said: "This transaction represents another key de-risking step for the Siemens Benefits Scheme and we are delighted to provide further security to the trustees and their members.
"L&G have been working with the scheme for many years and L&G Investment Management helped to set up the liability-driven investment portfolio in 2008. We look forward to continue our relationship over the coming years."
The trustees were advised by Aon and Sackers, while L&G received legal advice from Eversheds Sutherland.
Aon principal consultant Karen Gainsford said: "We are really pleased to have assisted the trustee with this significant transaction through a period of substantial volatility in financial markets. The transaction followed a period of meticulous preparation, while the agile and flexible process that we proposed allowed the trustee to take advantage of market conditions and insurer appetite.
"The scheme's nimble governance was key to us being able to secure attractive terms so efficiently. It's a great example of what will be needed throughout the remainder of 2020, as schemes seek to secure benefits in what is set to become a busy market once again."
The ICI Pension Fund has completed its ninth buy-in with Legal & General (L&G), insuring a further £70m of benefits and bringing total insured benefits with L&G to around £5.8bn.
Just Group completed £460.3m of bulk annuity deals in the six months to 30 June, its half-year results have revealed.
The Littlewoods Pensions Scheme has completed a buy-in covering just under £930m of around 6,500 members’ benefits with Rothesay Life, the majority of which relate to deferred members.
There have now been a total of over 50 buy-in and buyout deals of over £500m announced since 2007. The full list is as follows...
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