A UK pension scheme sponsored by a subsidiary of Deutsche Bank has agreed a £570m (€653m) buy-in transaction with Legal & General Assurance Society.
It is the first pension risk transfer for the scheme, which has a strategy to reach full insurance over the medium-term.
The scheme has around £4.5bn in assets and a funding surplus.
Michael Wrobel, chair of the trustee board of the DB (UK) Pension Scheme, said the buy-in was a “significant step on our de-risking journey and the excellent outcome with Legal & General reflects the expertise and collaborative approach of our advisers and our close working relationship with the Bank”.
Jeremy Sowden, head of pensions and benefits UKI, Deutsche Bank AG, said the transaction represented a continuation of a productive partnership with the trustee board.
“It is part of the ongoing journey to reduce risk in relation to our defined benefit pension obligations, benefitting the scheme members, the trustee board and the bank,” he added.
“ A number of metrics and objectives were jointly agreed by the bank and the trustee board at the outset and this transaction delivers on those.”
Legal & General said the deal was completed under what is known as an umbrella contract, which allows future transactions with Legal & General to be completed quickly and easily on pre-agreed terms when favourable pricing opportunities arise.
David Fink, partner at LCP, which advised the trustee, said the consultancy believed “a targeted, intelligent strategy using umbrella contracts is going to increasingly be the norm for large schemes”.
Legal & General Investment Management is the pension scheme’s liablity-driven investment manager.
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