Legal & General Assurance Society Limited has agreed a fourth and final buy-in policy with the British Steel Pension Scheme, totalling £2.7 billion, under which the remaining 40% of liabilities were insured. The move makes the scheme the largest in the UK to have fully insured all its members’ benefits.
Legal & General has now insured £7.5 billion of the Scheme’s liabilities, securing the benefits of about 67,000 retired and deferred members, many of whom are in North Lincolnshire and Yorkshire.
The announcement marks the Scheme’s fourth transaction since November 2021. Through a series of phased buy-ins over this 18-month period, the Scheme has now insured all its liabilities with Legal & General and becomes the largest scheme in the UK to have secured full insurance.
By completing this transaction, the Scheme has now reached a funding level that will allow the Trustee to make additional payments (referred to as “restoration”) to members under the agreement reached when the Scheme was set up.
To insure benefits at this scale, Legal & General worked in partnership with the Trustees, Sponsor, the Scheme’s in-house teams and advisors. This included establishing an umbrella contract with the Trustees in 2021, which allowed them to complete each transaction quickly and easily on pre-agreed contractual terms.
It also saw the Scheme’s in-house investment management transfer to Legal & General Investment Management in 2022 to implement a strategy to improve the Scheme’s funding level by aligning investments with L&G’s pricing.
