Legal & General Group Plc (“Legal & General”) announces that its global PRT business has completed eight transactions over March, securing a total of £261m of pensioners’ benefits. The deals, covering UK and US pension schemes, range in size from approximately £2.2m to £80m. Three separate transactions were signed on Friday 27 March alone.
2 Apr 2020
These are challenging times for many and the security of income in retirement is a concern to current and future pensioners. Our customer service team is working remotely and continuing to service and support pension scheme members, many of whom are relying on receiving their pensions at this worrying time.
The PRT market in both the UK and the US continues to transact, with well-prepared schemes in particular taking advantage of the good pricing opportunities available.
Legal & General’s Pension Risk Transfer (PRT) team is well accustomed to ‘agile working’, but has now developed practices to remotely price, negotiate, and sign PRT deals. This puts us in a strong position to continue meeting market demand for PRT over the coming months as the Covid-19 situation continues.
Chris DeMarco: "Amidst a challenging environment and great uncertainty, today’s announcement demonstrates that despite the significant disruption we are still able to provide security to pension scheme members through risk transfer transactions.
Recent history demonstrates that periods of market disruption may provide opportunities for schemes to de-risk their schemes. The sharp widening of credit spreads, combined with the strong appreciation in the value of gilts many schemes are holding, has improved buy-in and buyout pricing.
Legal & General have in place the team and resources to continue servicing our clients remotely as well as meeting demand for further risk transfer transactions. We are pleased that we were able to help these eight new schemes to safeguard their members’ benefits."
Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.2 trillion in total assets under management* of which 39% is international. We have a unique and highly synergistic business model, which continues to drive strong returns. Legal & General provides powerful asset origination and management capabilities directly to clients, which also underpin our leading retirement and protection solutions. We are a leading international player in Pension Risk Transfer, in UK and US life insurance, and in UK workplace pensions and retirement income. Our purpose is to improve the lives of our customers and create value for our shareholders. Through inclusive capitalism, we are investing in long-term assets, such as real estate and infrastructure, that can help build a better society for the future.
Legal & General Retirement Institutional (LGRI) 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. Including the premium to be received in relation to this transaction, LGRI has annuity assets estimated at £63bn.