London Heathrow’s BAA Pension Scheme has agreed a buy-in of around £370m (€438m) with Legal & General Assurance Society, its second pension risk transfer deal with the insurer.
The new buy-in covers the benefits of more than 1,400 retirees. The scheme’s sponsor, Heathrow Airport Limited, runs London Heathrow airport.
Legal & General has now secured the benefits of nearly 3,000 members of the £4.8bn scheme, following a £325m buy-in in 2018. In 2020 the scheme started working with Legal & General as an asset manager.
“The trustee is delighted that this deal continues to de-risk the overall pension scheme and the deal is testament to great teamwork between L&G and the trustees excellent advisory team,” said Phil Wilbraham, chair of trustees.
An umbrella contract was established as part of the transaction, which those involved say enables the trustees to potentially insure further liabilities quickly and easily as it continues its de-risking plans.
The pension scheme was advised on the transaction by LCP and legal advice was provided by CMS. MacFarlanes provided legal advice to Legal & General.
“Having built trust and a strong relationship with the trustee over a number of years, we are delighted to have secured the retirement benefits for another 1,400 members,” said Adrian Somerfield, director, Legal & General Retirement Institutional.
Ken Hardman, partner at LCP, said the positive outcome as achieved through collaboration between advisers, trustees, corporate sponsor and L&G, “allowing us to optimise the drivers of pricing and execute efficiently”.
Other recent pension risk transfer deals include a full buy-in for Stantec Pension Plan, of an undisclosed size, with Just Group, and a £400m buy-in for the Merchant Navy Officers Pension Fund, done with Pension Insurance Corporation.
In January, the Imperial Tobacco Pension Fund announced having completed a £1.8bn bulk purchase annuity transaction with Standard Life.
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