The TI Group Pension Scheme with the support of its sponsor, Smiths Group, the global technology company, has chosen to insure a portfolio of its pensions in payment with Legal & General.
The transaction involved approximately £250m of assets being transferred to Legal & General in return for which Legal & General will make the regular annuity payments to the Scheme.
The annuity purchase is an investment by the TI Group Pension Scheme involving approximately 20% of its assets. Current and future Scheme pensioners will see no change in their benefits or the way in which they are paid.
Simon Gadd, Managing Director, Legal & General’s Annuities Business, said: “We are seeing a significant increase in the number of trustee bodies considering options to reduce the risks involved in running their pension schemes. Our flexible, competitively priced products – backed by our extensive track record within the annuity market, and the long-term financial security of Legal & General, is an attractive proposition to many clients. We were delighted to work with the TI Group Pension Scheme to agree this flexible solution for the scheme”.
“As the pension risk transfer market develops we are able to deploy our expertise, built up over many years in the traditional bulk annuity market, to the benefit of a wider range of customers.”
Mike Abrams, Director, UK Pensions, speaking for the Scheme said:
“Scheme members will see no change in the amount of their benefits or the way in which they are paid as a result of this investment. The Trustee chose to purchase annuities to match a portion of the Scheme’s liabilities, the aim being to reduce the effect of changing investment and mortality conditions on the Scheme’s funding position, so providing greater security and stability in the funding of all members’ benefits. We look forward to working with Legal & General.”
The Trustee was advised on this purchase by Aon Consulting, Mayer Brown International and Mercer.