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L&G completes £1bn longevity insurance deal

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Legal & General has agreed a £1bn longevity insurance deal with the Pilkington Superannuation Scheme.

The transaction insures against the risk of 11,500 current pensioners in the scheme living longer than expected. L&G has also entered into a longevity reinsurance agreement with Hannover Re in respect of the scheme.

This follows a £1.1bn buy-out deal with the Turner & Newall pension scheme in October last year.

L&G chief executive Tim Breedon (pictured) says: “In the UK and globally, the pension fund de-risking market will continue to grow as pension funds look to further de-risk.

“These transactions leverage our expertise in investment management and longevity risk pricing, and I see us remaining at the forefront of this rapidly developing pensions market.”

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  1. Aha ~ if a deal of this nature can be struck in respect of a large FS scheme such as that of Pilkington, then a similar deal could be struck as part and parcel of the Retirement Income Bond which the government should allow insurers to offer as an alternative to the shackle of annuity rates.

    But, despite Steve Webb’s proclamation that he’s open to suggestions as to how the pensions landscape could be improved, it seems quite clear to me that this isn’t tha case at all. I wrote to him on this very subject and received nothing but a bland, non-committal acknowledgement from one of his minions. Okay, I didn’t expect an enthusiastic response along the lines that the Retirement Income Bond is the best proposal they’ve ever received and they’ll definitely incorporate it into the government’s programme of positive reform. But the response I have received is so tepid that I very much doubt that any notice at all of my suggestion will be taken.

    So much for the Conservatives’ pre-election manifesto pledge to undo as much as possible of the damage done to the pensions framework by successive governments over the past 25 years. All the government appears to be interested in is steamrollering ahead NEST, which is basically forcing millions of people to participate in a manifestly broken pensions framework. Why is that politicians so often say one thing before an election but then, once they’ve taken office, pursue an entirely different agenda?

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