A UK pension scheme sponsored by a subsidiary of Deutsche Bank has agreed a £500m buy-in deal with Legal & General, securing benefits for a further 2,000 members.
This is the third buy-in for the scheme and takes the scheme’s total buy-in to £1.5bn, including a £570m buy-in between Legal & General and Deutsche Bank Pension Scheme announced in February 2021.
The scheme is an existing client of Legal & General Investment Management and confirmed it had reached a well-funded position over recent years. The scheme made use of the existing umbrella contract with Legal & General, allowing the buy-in to be transacted quickly and efficiently on the same commercial terms.
Michael Wrobel, chair of the trustee board for Deutsche’s Defined Benefit (UK) Pension Scheme, said: “We are very pleased to have insured another significant proportion of the scheme’s liabilities with Legal & General, further reducing the risks the scheme is exposed to.”
Wrobel said that the existing relationship with Legal & General, including the umbrella contract in place, resulted in a smooth and efficient process benefiting all parties and ultimately the members of the scheme.
He continued: “The trustee and the bank remain ready to continue to take advantage of future opportunities to further de-risk as they arise.”
Jeremy Sowden, head of global pension and benefits at Deutsche Bank, said the latest transaction means that approximately half of the scheme’s total liabilities have now been insured, covering not just all pensions in payment but also a significant proportion of pensions that are yet to do so.
He added: “We will continue to work with the trustee to extend the buy-ins as further opportunities arise. The existing relationship with Legal & General allowed us to move quickly to lock in attractive pricing and is an excellent result for all parties.”
Aysha Patel, new business and origination lead at Legal & General Retirement Institutional, said the transaction demonstrated that partial buy-ins continue to be an effective de-risking tool for larger schemes on their way to full insurance, allowing them to take advantage of favourable market opportunities when they arise.
She continued: “We look forward to providing additional security to their pension scheme members.”
Read the digital edition of IPE’s latest magazine