BSPS secures fourth and final buy-in with L&G

Written by Sophie Smith

18/05/2023

The British Steel Pension Scheme (BSPS) has agreed a £2.7bn buy-in with Legal & General (L&G), the fourth and final buy-in for the scheme, making it the largest scheme in the UK to have secured full insurance.

The transaction covers the remaining 40% of the scheme’s liabilities, meaning that L&G has now insured £7.5bn of the scheme’s liabilities, securing the benefits of all 67,000 retired and deferred members.

Following the latest buy-in, the scheme has also reached a funding level that will allow the trustee to make additional payments to members under the agreement reached when the scheme was set up.

The deal follows three previous buy-in deals with L&G, with an umbrella contract set up in 2021 that allowed the scheme trustee to complete each transaction quickly and easily on pre-agreed contractual terms.

The trustees were advised on all four buy-in transactions by LCP and received legal advice from Travers Smith.

The sponsor, Tata Steel UK Limited, was advised on the transactions by Mercer and Slaughter and May, while L&G received legal advice from CMS Cameron McKenna Nabarro Olswang LLP.

L&G Retirement Institutional CEO, Andrew Kail, said: “We are extremely proud of the work that we have done with the scheme over the past two years. This is a great result not only for the trustees and sponsor but also for members.

“These kinds of outcomes are only achieved with the hard work and support of a wide group of people following a carefully considered and well executed plan. By working in partnership with the trustees and sponsor to bring together expertise across L&G, we secured all members’ benefits far faster than initially anticipated.”

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