The Nortel Networks UK Pension Plan has agreed a second buyout worth £105m (€122m) with Legal & General Assurance Society Limited.

The move follows a £2.4bn buyout transaction between the scheme and Legal & General back in 2018, which ended the fund’s long assessment period in the Pension Protection Fund (PPF). Through this initial transaction, Nortel was able to secure benefits that were higher than PPF levels.

The scheme originally entered PPF assessment following its sponsor, Nortel Networks UK Limited, going into administration in 2009. Since the transaction with Legal & General in 2018 the plan has received additional funding through the sponsor’s insolvency proceedings.

This second buyout will use some of these funds to provide additional benefits to scheme members on terms that were agreed alongside the original transaction. A further transaction is likely to follow in the future, it was announced.

Clive Gilchrist, chair of the scheme’s trustees, said: “The completion of this second transaction is a significant milestone in what has been a 12+ year process. Since 2009 we have worked with our advisers with the objective of improving outcomes for all of our members, first through maximising recoveries from Nortel’s worldwide insolvency proceedings and then implementing a completely new approach to securing benefits in a PPF+ scenario.”

Isio advised the trustee on the transaction while legal advice was provided by Travers Smith. Legal & General received legal advice from Eversheds Sutherland.

Rachel Cutts, origination and execution director at Legal & General Retirement Institutional, added: “The success of this transaction is a direct result of the solutions-driven framework that we put in place in 2018 in collaboration with the trustee and its advisers, which has now allowed us to further enhance the benefits for so many of Nortel’s pension plan members.”

This transaction, she noetd, “builds on Legal & General’s track record of structuring and delivering beneficial outcomes for members of pension schemes that enter PPF assessment”.

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