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Legal & General completes £530 million buy-in transaction with Siemens
Legal & General Assurance Society Limited (“Legal & General”) today announces that it has completed a £530 million buy-in for the Siemens Benefits Scheme (“the Scheme”), securing the benefits of more than 2,000 UK retirees.
18 Aug 2020
This buy-in marks the Scheme’s first Pension Risk Transfer (PRT) transaction with Legal & General and builds on a previous transaction it completed in 2018. The Scheme has chosen an umbrella contract to allow for potential future transactions to be completed quickly and easily, when the time and market conditions are right.
The Trustees ran an agile and flexible process, which allowed them to take advantage of favourable pricing opportunities in the market, and to move quickly to meet their objectives.
The Trustees were advised on the transaction by Aon and Sackers. Legal advice was provided to Legal & General by Eversheds.
Gavin Smith, Pricing & Execution Director, Legal & General Retirement Institutional: "This transaction represents another key de-risking step for the Siemens Benefits Scheme and we are delighted to provide further security to the Trustees and their members. Legal & General have been working with the Scheme for many years and Legal & General Investment Management Limited helped to set up the liability-driven investment portfolio in 2008. We look forward to continuing our relationship over the coming years."
Joanna Matthews, Chair of the Trustee: "I am delighted that we have been able to complete another key step in the Trustee’s de-risking journey. Through careful planning, we were able to overcome the logistical and investment challenges posed by Covid-19 and complete this transaction at this time on very favourable terms. This is a fantastic outcome and I would like to thank all involved in the process."
John Smith, Head of Pensions, Siemens plc: "This is another major milestone for the Siemens Benefits Scheme. I am pleased L&G were able to offer us competitive terms for this transaction, allowing us to continue to build on the long-standing relationship we have with them here in the UK."
Karen Gainsford, Principal Consultant, Aon: "We are really pleased to have assisted the Trustee with this significant transaction through a period of substantial volatility in financial markets. The transaction followed a period of meticulous preparation, while the agile and flexible process that we proposed allowed the Trustee to take advantage of market conditions and insurer appetite. The Scheme's nimble governance was key to us being able to secure attractive terms so efficiently. It’s a great example of what will be needed throughout the remainder of 2020, as schemes seek to secure benefits in what is set to become a busy market once again."
Further information
Margrit Williams
Director of External Engagement
Legal & General Capital
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.