L&G completes £1.6bn buy-in with the BP Pension Fund

The insurer said the pension risk transfer (PRT) deal – the first for the oil firm's £18bn scheme – was defined by "close collaboration" between the two parties, including agreeing terms to further support the security of members' benefits.

L&G said it was able to provide a gilt-based price lock using the fund's gilt holdings – a move it said which ensured price certainty while the terms of the transaction were finalised, aiding the smooth execution of the deal during a period of elevated market volatility.

The BP Pension Fund trustee board was advised by Aon as lead transaction adviser, with Linklaters providing legal advice and Cardano providing insurer covenant advice. Mercer acted as scheme actuary with Redington providing strategic investment advice to the trustee. Macfarlanes and DLA Piper provided legal advice to L&G.

L&G chief executive of institutional retirement Andrew Kail said: "We are delighted to have completed this buy-in with the fund, which supports the fund's trustee in its management of risk. A huge thanks to everyone involved for their hard work on the transaction, and to the trustee for its positive engagement during a thorough selection and implementation process."

BP Pension Fund trustee chair Brendan Nelson added: "This buy-in follows a detailed review of the options available to support the fund's de-risking journey and hence the security of members' accrued benefits.

"On behalf of the board, I'd like to thank L&G for their collaboration throughout our journey from initial exploration to concluding this transaction, and our advisers for their support."

L&G has completed several risk reduction deals in the last 12 months, including a £25m buy-in with the Misys Retirement Benefits Plan, an £800m buy-in deal with the Honda Group UK Pension Scheme, a £505m buy-in deal with the Inchcape Motors Pension Scheme which secured the benefits of 2,295 retirees and 5,890 deferred members, and its £1.1bn full buy-in deal with Deutsche Bank.