The Legal & General Group Plc (LON: LGEN) share price traded sideways after announcing that it had completed the full buy-in for the Boots pension scheme. The transaction was worth £4.8 billion and marks a pivotal milestone in the de-risking journey for the retirement fund.
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The move secures the pension benefits of all 53,000 retirees and deferred members of the Scheme, making it the largest single transaction in the UK in terms of premium size. Furthermore, for Legal & General it represents the largest single transaction regarding the number of members involved.
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Boots, a company with a history dating back 174 years and currently a leading health and beauty business in the UK with over 2,000 stores and a workforce of 52,000 employees, sponsors the Boots Pension Scheme.
Legal & General has maintained a long-standing relationship with Boots, providing investment management services to the Scheme for over two decades.
This buy-in agreement marks the culmination of a de-risking process that the Scheme embarked on in 2001. It represents a pioneering step forward in de-risking defined benefit (DB) pension schemes by offering a combined investment and insurance solution for the Scheme’s asset holdings.
The transaction was a collaborative effort, with Legal & General working closely with the Sponsor and Trustee to manage various aspects of the deal, including asset transition and deferred premiums features.
This bulk annuity deal stands as Legal & General’s largest-ever single Pension Risk Transfer (PRT) transaction, highlighting the company’s expertise and capacity in the pension risk management space.
Andrew Kail, CEO of Legal & General Retirement Institutional, said: “We are very pleased to have agreed this buy-in today with the Boots Pension Scheme, representing our largest-ever single transaction. This is a testament to our long-standing relationship with the client, and I am proud that we have been able to work seamlessly across our insurance, reinsurance and investment management capabilities to deliver an excellent outcome. We are continuing to see an unprecedented acceleration in demand in this sector, driven by more pension schemes being closer to buyout than ever before. Against this backdrop, we have posted a record year with £13.4bn of global PRT written to date.”
Legal & General (LGEN) share price.
The Legal and General share price traded sideways after completing the full buy-in for the Boots pension scheme.
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