On the go: The circa £156.1m Nortel Networks UK Pension Plan has agreed a £105m buyout with Legal & General Assurance Society, the second transaction of this type with the insurer.
The latest buyout will provide additional benefits to around 8,200 retirees and 4,300 deferred members. It follows the scheme’s £2.4bn buyout with L&G in 2018, which secured benefits in excess of Pension Protection Fund levels for members.
The scheme originally entered PPF assessment following its sponsor, Nortel Networks, going into administration in 2009. Since the first buyout, the plan has received additional recoveries through the sponsor’s insolvency proceedings.
This second buyout uses some of these funds to provide additional benefits to plan members on terms that were agreed alongside the original transaction. A further transaction is likely to follow in the future, according to a statement.
Clive Gilchrist, chair of trustees of Nortel Networks UK Pension Plan, said: “The completion of this second transaction is a significant milestone in what has been a 12-plus year process.
“Since 2009 we have worked with our advisers with the objective of improving outcomes for all of our members; first through maximising recoveries from Nortel’s worldwide insolvency proceedings, and then implementing a completely new approach to securing benefits in a PPF-plus scenario.”
He continued: “We’re now one step closer to completing this journey and we look forward to working with our advisers and L&G to secure further benefits with the remaining funds left in the plan.”
The scheme’s trustees were advised on the transaction by Isio and legal advice was provided by Travers Smith. Legal advice was provided to L&G by Eversheds Sutherland.
This article originally appeared on Mandatewire.com
