Legal & General signs Â£1.1bn bulk annuity contract with the trustee of the T&N Retirement Benefits Scheme (1989).
24 October 2011
The trustee of the T&N Retirement Benefits Scheme (1989) today announces that it has entered into a bulk annuity contract with Legal & General worth £1.1bn.
The scheme has been in a Pension Protection Fund (PPF) assessment period since 2006. However, because the scheme's financial strength exceeds the threshold below which the PPF would automatically step in, the trustee must by law prepare to wind up the scheme outside the PPF. Current and future scheme pensioners will see no immediate change in the way in which their pension payments are made, and will receive timely updates on any changes to the administration of the scheme.
Legal & General has the administrative capability, the pensions expertise and the reputation in the market to deliver a trusted service to the scheme members and has been working exclusively with the trustee and its advisers since April 2011 to ensure the best possible outcome.
Mercer Limited advised the trustee on the transaction, with Allen & Overy LLP providing legal advice to the trustee.
Tim Culverhouse, Managing Director, Alexander Forbes Trustee Services Limited, sole trustee of the Scheme said: "The trustee, Legal & General and their advisers have worked hard to make this transaction achievable, given the legal requirement to prepare to wind up the scheme outside the PPF. As a result, I hope it will be possible to apply a small one-off uplift to members' annual pensions in due course.
The scheme's financial position is such that it remains unable to pay members' full original pensions. I regret that there is no real prospect that the scheme could ever have sufficient assets in the future to provide members with a larger pension than Legal & General will provide.
The trustee selected Legal & General following a competitive selection, due diligence and negotiation process."
David Ellis, Principal, Mercer Limited said: "Mercer is delighted to have advised the trustee on this landmark transaction. Mercer brought to bear its market-leading expertise and experience to ensure that this large and complex transaction was completed successfully and with the minimum of risk overall."
Tom Ground, Head of Business Development, Legal & General's Annuities Business said: "We are delighted to have been chosen by the trustee. It reflects the trustee's and its advisers' commitment to work with a provider they believe has the expertise, experience and financial security to deliver on all aspects of the arrangement.
This transaction was achieved by combining Legal & General's industry-leading investment management capability with our 25 years' experience of being a market leader in the annuity market. In addition, this transaction demonstrates Legal & General's ability to win large-scale bulk annuity business."
Notes to editors
For further information or to arrange interviews:
Mike Lord, PR manager for Alexander Forbes Trustee Services Limited
07831 401 311
Alistair Peck, Mercer Press Office
0207 178 3143 / 07789 030565
- Photos of Tim Culverhouse, David Ellis and Tom Ground are available on request.
- Legal & General is one of the UK's leading financial services companies and one of the UK's top 50 companies in the FTSE 100 Index. Over 5.75 million people rely on us for life assurance, pensions, investments and general insurance plans.
- Legal & General has been an active participant in the bulk annuity market for over 25 years and was this year's winner, along with LGIM, of the PIPA award for Best De-Risking provider. Legal & General provides annuities to over 550,000 current pensioners and over 200,000 deferred pensioners.
- 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.
- The information contained in this release is intended solely for journalists and should not be used by consumers to make financial decisions.
- Legal & General Assurance Society Limited. Registered address: One Coleman Street, London EC2R 5AA. Registered in England No 166055.
For more information please contact:
t: +44 (0) 1737 375369
m: +44 (0) 7788 926790