On the go: The Legal & General Group UK Pension and Assurance Fund has completed a £925m assured payment policy transaction with Legal & General Assurance Society.
The deal has secured the cash flows to support benefit payments payable to approximately 2,000 retired and 2,800 deferred members of the pension fund.
L&G’s APP solution provides pension schemes with a method of liability cash flow matching, selectively insuring against investment related risks such as changes in asset yields, interest rates and inflation.
An APP allows a pension scheme to begin its derisking journey with an insurer and provides greater certainty on the timing and cost of a future buy-in or buyout, the insurer stated.
The fund’s sister scheme, the Legal & General Group UK Senior Pension Scheme, completed a similar APP transaction worth £400m last year, as previously reported.
Chris Martin, managing director at ITS, and chair of the trustees of Legal & General Group UK Pension and Assurance Fund, said: “The APP is a very significant event in the fund's lifetime as we move closer to securing our members' benefits.
“This is a unique product that removes a large proportion of the investment risk from the fund.”
LCP, Redington and Gowling WLG advised the trustee on the transaction.
This article originally appeared on mandatewire.com
