Legal & General agrees £1.8bn buy-in with United Utilities’ pension schemes

Written by Sophie Smith

20/07/2023

The trustees of the United Utilities Pension Scheme and the United Utilities Group of the Electricity Supply Pension Scheme have completed a £1.8bn buy-in with Legal & General Assurance Society Limited, covering around two thirds of the scheme’s liabilities.

Trustees were advised throughout the process by Aon, while Sackers provided legal advice and Mercer acted as the strategic investment adviser. The sponsoring employer, meanwhile, was advised by LCP and Slaughter May, and Clifford Chance provided legal advice to Legal & General.

Both schemes are existing clients of L&G, with L&G Investment Management (LGIM) having managed a proportion of the schemes’ assets since 1998.

As part of the deal, L&G provided a price lock to the assets held by the schemes, including the assets held with LGIM, which removed the risk of the buy-in price changing relative to the value of the schemes’ assets while the transactions were agreed.

Commenting on the deal, trustee boards chair, Gary Dixon, said: “We’re delighted to have completed this buy-in transaction across our two pension schemes, providing security for all our members and taking a further step on our de-risking journey.

“The trustees and company worked collaboratively throughout the process with excellent support from our advisers Aon, Mercer and Sackers.”

L&G Retirement Institutional chief executive officer, Andrew Kail, highlighted the deal as a “significant milestone” in the scheme’s de-risking journey.

“It was a pleasure to work closely with a longstanding L&G client and its advisers to put in place an arrangement that provides further long-term financial security to the schemes’ members,” he added.

Aon risk settlement group partner, John Baines, stated: “As a result of a clear strategy, a collaborative approach and meticulous planning, the trustees and company have achieved their highly bespoke transaction objectives.

“By insuring the majority of liabilities for both schemes, we helped develop and implement a number of innovative mechanisms to future-proof the transaction, that will result in increased security for all members.”


This article first appeared on our sister title, Pensions Age.

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