Today (19 July) Legal & General has announced it has completed a £750m pension buy-in transaction for the ICI Pension fund.
Legal & General and ICI Pension fund executed the £750m pension risk transfer deal shortly after the European Union referendum, to make good use of “market opportunities”, according to the companies.
ICI Pension fund has now executed £5bn in pension risk transfers with Legal & General since 2014.
According to Legal & General, large pension funds are moving towards an ‘incremental approach’ to pension risk transfer.
The firm added pensioner buy-ins - where a company essentially buys an insurance policy to insure the future cost of its employee pension scheme - top-slicing and longevity insurance, are favoured steps for schemes seeking to manage the cost of a workplace pension.
Sales for Legal & General Retirement across bulk annuities, individual annuities and lifetime mortgages are £4.75bn.
They reached £4bn in the first half of 2016 compared to £2.9bn in the first half of 2015.
The firm has now executed bulk and individual annuity business in 2016 of £4.5bn year to date, compared to the 2015 full year annuity sales of £2.7bn.
In part, this is comprised of the £2.9bn Aegon back-book transaction in May, and £250m of pension risk transfer business conducted in June during the European Union Referendum period.
Commenting on the latest transaction, Cheryl Agius, head of strategic pension risk transfer, Legal & General Retirement said: “The strength and depth of our relationship with ICI Pension Fund enabled us move fast when the market opportunity presented itself.
“The result is a further step forward in the de-risking programme which we are helping the ICI Pension Fund Trustees to deliver for their scheme members.”
ruth.gillbe@ft.com
