Legal & General has entered into a £1.1bn bulk annuity buyout deal with the T&N Retirement Benefits Scheme (1989).
The scheme has been in a Pension Protection Fund assessment period since 2006.
However, L&G says because the pension 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 lifeboat fund.
The sole trustee of the scheme is Alexander Forbes Trustee Services. Consultant Mercer advised the trustee on the deal, while Allen & Overy provided legal advice.
Alexander Forbes Trustee Services managing director Tim Culverhouse says: “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.”