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Legal & General agrees £1.8 billion buy-in with United Utilities
18 Jul 2023
Legal & General Assurance Society Limited (“Legal & General”) today announces it has completed a £1.8 billion buy-in with the Trustees of two pension schemes sponsored by United Utilities, the United Utilities Pension Scheme and the United Utilities PLC Group of the Electricity Supply Pension Scheme (“the Schemes”). The transactions provide the Schemes with secure income from Legal & General that covers around two thirds of their liabilities.
United Utilities is a FTSE-100 listed water supply company. The Schemes are existing clients of Legal & General, with Legal & General Investment Management (“LGIM”) having managed a proportion of the Schemes’ assets since 1998.
Legal & General provided a bespoke price lock to the assets held by the Schemes, including the assets held with LGIM. This removed the risk for the Trustees of the buy-in price changing relative to the value of the Schemes’ assets while the transactions were agreed.
Aon advised the Trustees of the Schemes throughout the transactions and led the broking process while Sackers provided legal advice to the Trustees and Mercer acted as the Trustees’ strategic investment adviser. The Company was advised by LCP and Slaughter and May. Clifford Chance provided legal advice to Legal & General.
Andrew Kail, Chief Executive Officer, Legal & General Retirement Institutional “We’re pleased to have supported the Trustees in reaching this significant milestone in their de-risking journey. It was a pleasure to work closely with a longstanding Legal & General client and its advisers to put in place an arrangement that provides further long-term financial security to the Schemes’ members.We’re on track for one of our busiest years ever, having now written £6.7 billion of pension risk transfer business in the UK year-to-date. We look forward to continuing to support pension schemes throughout their de-risking journeys to reach their desired objectives.”
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Notes to editors
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with £1.2 trillion in total assets under management (as at FY23) of which c40% (circa £0.5 trillion) is international.
We have a highly synergistic business model, which continues to drive strong returns. We are a leading international player in Institutional Retirement, in Retail Savings and Protection, and in both public and private markets through our Asset Management division. Across the Group, we are committed to responsible investing and dedicated to serving the long-term savings and investment needs of customers and society.
As at 7 June 2024, we estimate the Group’s Solvency II coverage ratio to be 224%.
As at 11 June 2024, Legal & General has a market capitalisation of £14.6 billion.
Institutional Retirement works with trustees and sponsoring companies of defined benefit (DB) pension schemes of all sizes to settle their pension obligations and secure scheme members’ benefits, through a full range of buy-ins, buyouts and other de-risking solutions. Our Client Services’ 12-month rolling Net Promoter Score (NPS) is above +70, which is widely regarded as being at a “world class” level. Legal & General is the UK’s longest-standing active bulk annuity provider.
Our UK Retirement annuity book stands at an estimated £86.1 billion at 31 December 2023. Across the group over £30 billion is invested in direct investments that deliver positive social and environmental impacts, such as clean energy and affordable housing. Legal & General provides income and pension security to more than a million retirement customers around the world.