Legal & General insures £600m of Pearson Pension Plan and sees strong momentum in its Pension Risk Transfer business in the UK and US
17 Oct 2017
Legal & General Group plc has announced that its Retirement Division (LGR) has concluded a pension buy-in with the Trustee of The Pearson Pension Plan (“the Plan”), for a premium of approximately £600 million.
The buy-in covers around 2,400 members of the Plan and helps the Trustee align its investments more closely with the pension benefits that the Plan is paying to members. The buy-in utilises an innovative “umbrella” contract structure that allows for further transactions to be completed quickly under existing contracts.
Chris DeMarco, Managing Director of UK PRT, said:
“The Pearson Pension Plan is a long standing client of Legal & General and we are delighted to have been selected as a buy-in partner for this next stage of the Plan’s de-risking journey. We look forward to continuing to build on our relationship with the Trustee and further supporting them in securing and protecting their members’ pensions.”
This latest transaction is another example of the strong momentum that we continue to see in the pension risk transfer market in both the U.K. and the U.S. In addition to the buy-in announced today, we have completed five transactions in the U.S. since the end of June for total premium of just over $120 million.
These transactions follow the strong first half of the year that we disclosed in our recent half year results which totalled £2.4 billion in pension risk transfer premiums and included buy-ins with The Plumbing & Mechanical Services (UK) Industry Pension Scheme and the Old Mutual Staff Pension Fund.
Kerrigan Procter, Chief Executive Officer, Legal & General Retirement, added:
“As trustee boards and sponsoring companies continue to improve scheme funding and manage down their risks, we are seeing demand for buy-ins, buyouts and longevity insurance grow. In the UK alone, we are currently quoting on circa £15 billion of pension buy-in and buyout business. While not every one of these opportunities will transact, it highlights the underlying strength that exists in the market and how increasing numbers of trustees are looking to us to help them deliver their members’ benefits.”
Legal & General Group Plc:
- Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £15.8bn (as at 16 Oct 2017) and is responsible for investing £951bn worldwide (as at 30 June 2017) on behalf of investors, policyholders and shareholders.
- Legal & General has nearly ten million individual customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance.
- Legal & General has been an active participant in the UK bulk annuity market for over 30 years. Legal & General offers a range of de-risking solutions, which includes buyout, buy-in, longevity insurance and liability-driven investment (LDI), to pension schemes of all sizes. Legal & General has expertise in investment management, all aspects of defined benefit provision as well as an in-depth understanding of mortality trends and longevity risk.
- For full year 2016, Legal & General's adjusted operating profit (IFRS basis) was £1,628m and adjusted earnings per share were 22.20p for the period, an increase of 11% and 19% respectively. Net release from operations (net cash) was up 12% to £1,411. Full year dividend was up 7% to 14.35p, with adjusted return on equity at 19.6%. Legal & General Retirement new business was £8.5bn, and annuity assets were up 25% to £54.4bn. Group wide direct investments were up 39% to £10bn.
- Legal & General is listed on the London Stock Exchange with the ticker symbol LGEN.LN and has an American Depositary Receipt ticker symbol OTC:LGGNY. Further information on our ADR program can be found here: http://www.legalandgeneralgroup.com/investors/adr.html
For more information on Legal & General, please see http://www.legalandgeneralgroup.com/