Bulk annuity latest: Construction group seals £16m buy-in
Building company John Graham Construction has completed a £16m buy-in with Legal & General (L&G).
The deal covers 172 retirees and deferred members of the John Graham (Dromore) Limited Pension and Life Assurance Scheme.
The scheme is a client of L&G’s asset management arm, Legal & General Investment Management (LGIM), and received a “price lock” from the insurer over the scheme’s assets as the buy-in terms were agreed. It also meant the scheme could use L&G’s Flow proposition for streamlined insurance transactions involving LGIM-managed assets.
The sponsor’s parent company, Graham Group, has worked with L&G on construction projects in several UK cities.
Michael Graham, chair of the trustee board, said this relationship made L&G a “natural and compelling insurer”.
Matthew Dales, director of UK pension risk transfer at L&G Retirement Institutional, said: “This transaction illustrates how Legal & General is supporting pension schemes of all sizes. The trustees worked with us on an exclusive basis and followed our streamlined Flow process to ensure a seamless and straightforward transaction.”
Karen Gainsford, insurance director at Isio, which advised the trustees on the deal, added: “[The buy-in] has been achieved through a combination of Legal & General’s competitive pricing, collaboration across advisers and with all parties working closely from the outset to facilitate detailed planning and nimble decision making.
“While the bulk annuity market remains busy, our approach ensures that trustees gain traction with insurers to transact efficiently and with certainty that the objectives of both the trustees and the sponsoring company will be met.”
PIC targets small schemes with streamlined service
Specialist insurer Pension Insurance Corporation (PIC) has launched Mosaic, a “streamlined” service for pension schemes with less than £100m in assets looking to complete a buyout.
The service offers price monitoring and standardised processes and contracts to give trustee boards a straightforward, efficient way of securing member benefits.
PIC estimates that there are approximately 800 schemes in this bracket that are more than 100% funded on a buyout basis.
Last year brought 226 transactions in total, according to Hymans Robertson, with a total value of £49.1bn. The average transaction value was £217m.
Mitul Magudia, chief origination officer at PIC, said: “By making the buyout process more straightforward and efficient, while establishing dedicated resources to maintain our customer service offering, Mosaic will provide additional capacity to the smaller end of the market and give schemes an additional attractive option to achieve their objectives in the buyout market.”
Printer companies secure buy-ins
The UK arm of US printer manufacturer Lexmark has completed a £46m full scheme buy-in with Canada Life. The transaction is a step towards buyout and wind-up.
The transaction, which was completed in March 2024, secures the benefits of 177 pensioners and deferred members.
Mark Channon, the Lexmark scheme’s actuary and deal lead at consultancy Broadstone, said the scheme had secured “excellent pricing” from Canada Life, meaning the sponsor did not need to contribute any additional capital.
“It is evidence that preparation, patience and the right strategy can achieve a great result despite strong competition in the current insurance market,” Channon added.
Chair of trustees Richard Pells said the scheme had been targeting an insurance transaction “for some time” as its funding position improved.
Separately. earlier this month PIC backed a full scheme buy-in of the Epson Telford Limited Pension & Assurance Scheme worth £50m.
The deal covers 368 pensioners and 493 deferred members. The scheme’s sponsor specialises in manufacturing ink cartridges and textile inks, and is owned by Seiko Epson Corporation.
It follows a £60m buy-in for sister company Epson UK’s pension scheme with Just Group, completed in February.