November 27, 2014 – Legal & General’s Retirement, (LGR) business has secured a £2.5 billion partial buyout with the TRW Pension Scheme, (“the Scheme”) removing these liabilities from TRW Automotive’s balance sheet and insuring over 22,000 of the Scheme’s pensioners.
This is the largest pension buyout in the UK to date and follows the £3.0 billion bulk annuity buy-in arrangement with the ICI Pension Fund that Legal & General secured earlier this year, confirming Legal & General’s position as the leading insurer in tailored pension de-risking solutions for larger schemes.
Not only is this the largest buyout transaction, but it also incorporates a number of innovative elements that were included as part of an integrated, broader risk management strategy for the Scheme. In particular, a pension increase exchange offer was made to over 15,000 pensioner members as part of the buyout process. These individuals were given the option to receive a higher level of non-increasing pension income in place of inflation linked income, coupled with the security of their pension being insured with Legal & General. Over 5,500 of these individuals accepted the pension increase exchange. TRW also chose to insure the liabilities for a further 16,000 of the Scheme’s pensioners with Legal & General and in doing so securing the benefits of nearly all of its UK pensioners.
The Scheme previously implemented a liability driven investment strategy with Legal & General Investment Management in 2007.
Legal & General was selected as the insurance partner for the TRW Pension Scheme following a competitive tender process.
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