On the go: The Legal & General Group UK Senior Pension Scheme completed an assured payment policy transaction worth around £400m with the Legal & General Assurance Society in December 2020.
The derisking transaction secures investment risk protection for the pensions of around 200 deferred members and 385 pensioner members.
The APP solution provides the scheme with a precise method of liability cash flow matching through selectively insuring against investment-related risks, such as changes in asset yields, interest rates and inflation.
The transaction was structured around the scheme’s existing buy-in arrangements with L&G. This tailored approach provides enhanced certainty for the scheme to reach a buyout within its planned timeframe.
Frankie Borrell, head of client solutions at Legal & General Retirement Institutional, explained that the APP solution “allows pension schemes to lock down investment and inflation risk on attractive terms, with the ability to then add longevity and wider demographic risk protection in the future through conversion to a bulk annuity”.
Chris Martin, chair of the trustee, noted that the APP “represents a very significant moment in the scheme’s lifetime as we move closer to securing our members’ benefits”.
LCP, Redington and Premier Pensions advised on the deal.
This article originally appeared on mandatewire.com
