Legal & General and Prudential have announced separate bulk annuity deals with the ICI Pension Fund covering total liabilities of £3.6bn.
The L&G deal accounts for £3bn of the fund’s liabilities, which the insurer says is the largest ever bulk annuity purchase arranged by a pension scheme in the UK.
L&G has £34.4bn in annuity assets as at 31 December, of which £21.1bn was bulk purchase annuity transactions.
Pru says its bulk annuity deal with ICI covers around six per cent of ICI’s UK defined benefit pensioner liabilities.
ICI Pension Fund chief executive Heath Mottram says: “Investment in these buy-in policies builds on the fund’s strong de-risking foundations. The transactions are the result of significant work by the trustee over the last six months including a thorough selection process and negotiation of competitive pricing and terms.”
L&G head of bulk annuities and longevity insuranceTom Ground says: “We are extremely pleased to have implemented this landmark buy-in arrangement with the ICI Pension Fund, one of the larger pension funds in the UK. This transaction further demonstrates L&G’s ability to provide innovative bulk annuity solutions to large pension schemes.”
Pru chief executive of UK & Europe Jackie Hunt says: “Pru is widely recognised for its innovative approach to scheme de-risking. This agreement demonstrates our ability to complete complex transactions within the bulk annuity marketplace where financial strength and a strong track record continue to be significant considerations for pension scheme trustees when selecting a partner.”