On the go: The Tate & Lyle Pension Scheme has completed a £930m buy-in with Legal & General Assurance Society.
This transaction covers around 4,800 scheme members and follows an earlier buy-in with L&G in 2012 for £350m. All 6,700 scheme members are now fully insured by L&G, with a total value of £1.2bn.
Commenting on the transaction, Michael Chatterton, managing director at Law Debenture Pension Trust and chair of the Tate & Lyle trustees, said: “This is great news for scheme members. We never imagined only a couple of years ago that there would be such an opportunity on the horizon.
“It is a fantastic conclusion to the derisking plan that LCP helped us agree six years ago with the company, and provides a blueprint for other schemes working towards full insurance.”
Clive Wellsteed, a Lane, Clark & Peacock partner who advised on the deal, helped the trustees put in place a long-term derisking plan shortly after their initial buy-in in 2012.
He said: “After identifying that the scheme could be within touching distance of full insurance in early 2019, well ahead of schedule, we worked closely with the trustees and company to navigate a hugely busy market and lock in the position with L&G.”
Imran Nawaz, chief financial officer at Tate & Lyle, said: “We have supported the scheme over many decades and made significant cash contributions to remedy a deficit that has existed between the scheme’s assets and liabilities.
“That funding, combined with excellent stewardship by the scheme’s trustees, has resulted in a positive situation whereby the scheme can now be derisked for the benefit of members and the company.”
According to Mr Wellsteed, transactions like this are “providing unstoppable momentum in the buy-in and buyout market with more than £30bn of deals since this time last year.”
He expects “a flurry of transactions to follow in Tate & Lyle’s footsteps over the next few months”.
