Legal & General's new deferred premium de-risking facility used by Kenwood Pension Scheme.
04 July 2013
The transaction incorporates a deferred premium facility, which means that the covered members' benefits are fully insured from the point of signing but part of the full premium will be payable over a number of years in a way that suits the sponsoring employer, Kenwood Appliances Ltd. Kenwood is the manufacturer of the famous Kenwood Chef and the company is part of the DeLonghi Group.
Tom Ground, Head of Bulk Annuities, Legal & General, said: "We are pleased to have worked with the Trustees, their advisers and the Company to design a bespoke premium payment structure for this transaction. We expect that this approach to financing transactions will become increasingly popular as it allows volatility and risk to be removed immediately whilst also providing greater certainty over future contribution requirements for companies."
The Trustees were advised by Capita Employee Benefits ("Capita") and their legal advisers Burges Salmon.
Francis Fernandes, Senior Adviser, Capita said: "This transaction has allowed the Kenwood Trustees to take another big step to fully secure members' DB benefits in a way that meets both Trustee and Company objectives. Legal & General was prepared to spread the cost of the premium in a way that suited Kenwood and enabled insurance from day one without the Trustees running further investment risk."
Catrin Young, Senior Associate, Burges Salmon said:
"This was an interesting project to work on which involved the negotiation of non-standard wording to cover the deferred premium facility. This potentially paves the way for other trustee boards and companies to agree similar arrangements".
Tom Ground concluded: "Legal & General is delighted to offer this deferred premium facility now and, as a result, help other trustees and companies achieve their de-risking aims."
Legal & General has a strong reputation in the market due to the experience we have built up from arranging over 3,250 bulk annuity policies. The excellent services we are able to provide our annuity customers, which includes payroll, administration and communications, are scaleable and transportable. We have built the capability to write euro denominated business and are already in discussions with a number of organisations regarding global partnerships to help provide de-risking strategies for their pension arrangements.
Corporates, trustees or advisers looking for further information on the pension scheme insurance de-risking solutions available from Legal & General should call the team on 020 3124 2994.
Notes to editors
Background on Legal & General
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. Legal & General has been an active participant in the insurance solution pension de-risking market for over 25 years and was voted Buyout Firm of the Year at the European Pension Awards in June 2012.
Legal & General provides annuities to over 700,000 current pensioners and over 170,000 deferred pensioners and also completed a number of landmark transactions. These include the £1.1bn buyout of the T&N Retirement Benefits Scheme, the largest pension buyout in the UK to date and the £3.2bn longevity insurance transaction with the BAE Systems 2000 Pension Plan.
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 is also able to tailor a combination of LDI and longevity insurance to provide "DIY buy-in" solutions. 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 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
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