Ford drives biggest buy-in of 2025 with £4.6bn L&G deal

The deal covers around 35,000 members of the Ford Hourly Paid Contributory Pension Fund and the Ford Salaried Contributory Pension Fund, according to a press release from L&G.

The premium paid equates to approximately 62% of Ford’s UK defined benefit (DB) pension liabilities, which amounted to £7.5bn as of 31 December 2024, according to the company’s latest accounts.

The accounts showed Ford’s DB pensions to be 124% funded in aggregate, with £9.2bn of assets.

Ford trustees’ speedy journey to buy-in

The trustee board overseeing both pension schemes worked with consultancy group Aon, the lead adviser on the transaction, as well as Ford’s in-house investment management team to align the schemes’ investment strategy with L&G’s requirements.

The insurer said an existing relationship with L&G’s asset management unit helped keep the cost of the transactions down, as did the ability to transfer assets in specie direct to the insurance investment portfolio.

Jonathan Wood, chair of trustees for the Ford schemes, said: “Having worked towards this for many years, we are delighted to have achieved this significant further de-risking milestone, providing even greater security for our members.

“The outcome achieved is testament to the commitment and dedication shown over many years by the trustees and Ford to support the funds, as well as the skill and expertise of our advisers. We are delighted to extend our long-standing partnership with L&G through the buy-in for the funds and look forward to working together to continue to support our members.”

Hannah Brinton, partner at Aon, added that the deal showed “there are highly attractive insurance de-risking opportunities for large and well-prepared schemes, as well as the scope to negotiate bespoke terms to meet specific requirements”.

“Effective and nimble decision making, as well as many months of detailed preparation, including readying the asset portfolio within the existing investment structure, ultimately enabled the trustees to capture market opportunities and to secure an exceptional outcome for members,” Brinton said.

Mayer Brown and Hogan Lovells provided legal advice to the trustees. L&G were advised by Slaughter and May.

L&G’s lofty bulk annuity ambitions

As well as being the largest bulk annuity transaction this year, the Ford deal is the second-biggest that L&G has ever completed, the insurer said. It has completed £11bn worth of bulk annuity deals in 2025.

António Simões, chief executive officer at L&G, said the transaction put the insurer on track to achieve its targets in the bulk annuity sector. Last year, the company stated that it was targeting bulk annuity new business volumes of £65bn  by the end of 2028.