On the go: The £3.1bn Sanofi Pension Scheme has agreed a £760m buy-in with Legal & General Assurance. Separately, the scheme terminated an emerging market manager and replaced it with two new managers during 2020.
The buy-in deal secures the benefits of around 2,900 retirees. It is the Sanofi scheme’s first pension risk transfer transaction with L&G after being a long-term asset management client.
The scheme was advised on the transaction by Aon and legal advice was provided by CMS. L&G received legal advice from Macfarlanes.
Lisa Shufflebottom, trustee secretary, commented: “The trustee, with support from Sanofi, is very pleased to have secured a buy-in transaction with L&G.
“This buy-in is an important step in our long-term strategy and significantly reduces risk in the scheme, thereby providing greater certainty about the future costs of providing members’ pensions.”
The scheme’s Merial section entered into a buy-in with Rothesay in 2017, which was valued at £89m at the end of 2020. According to the scheme’s annual report, this was converted into a buyout in December 2020.
The scheme made several changes to its manager roster in 2020, including terminating Stewart Investors’ emerging market equity mandate.
The mandate was replaced by a 60:40 blend of emerging market equity mandates managed by TT International and Pzena Investment Management, respectively. At the end of 2020, TT managed assets worth £47.8m and Pzena handled £30.9m.
Additionally, the scheme terminated its index-linked gilts, gilts and liability-driven investments mandate with L&G in favour of an actively managed bespoke LDI mandate with Insight Investment, which stands at £1.7bn.
Elsewhere, the scheme’s triennial actuarial valuation, which is due as at January 1 2021, was scheduled to be completed in June.
The last valuation, effective as at January 1 2018, uncovered a 90 per cent funding level, which corresponds to a deficit of £278.7m.
This article originally appeared on MandateWire.com
