The Cable and Wireless Superannuation Fund, the pension scheme for the employees of the former British telecommunications company, has agreed to a £340m buy-in deal with Legal & General Assurance Society Limited, securing the benefits of around 1,800 retirees and deferred members.
The sponsoring company, Cable and Wireless Limited, is now part of Liberty Latin America, a provider of telecommunications services in more than 20 countries. The fund is a long-standing client of Legal & General Investment Management (LGIM) and is an existing policyholder of Legal & General.
This transaction marks the fund’s third and final deal with Legal & General, following buy-ins in 2017 and 2019. It is the culmination of a process of reducing investment and longevity risk in the fund, begun in 2008 when it purchased its first buy-in with Prudential.
The scheme has now insured all of its members, it was announced.
With support from Legal & General, the fund’s trustee was able to react to changing market conditions and transact at an opportune time, stated Legal & General, which provided a tailored solution to secure a complex, multi-currency benefit structure, including a price lock to the value of the fund’s LGIM assets.
LCP advised the fund’s trustee throughout the transaction while legal advice was provided by Hogan Lovells International. Clifford Chance provided legal advice to Legal & General.
Dean Johnson, trustee director, said: “This is a further important step in reducing the exposure of the fund to investment and other risks such as changes in life expectancy. With all benefits payable from the fund now matched by insurance contracts members can take great comfort in the security of their pensions in retirement.”
Kai Hoffmann, director at Legal & General Retirement Institutional, added: “The trustee and its advisers ran a very efficient process which allowed the fund to react to favourable market movements and implement an efficient solution for its complex benefits.”
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