Pensions Derisking
Our Pensions Derisking Group is at the forefront of devising and implementing structures which enable the transfer or limitation of defined benefit pension liabilities, and related assets, acting for scheme sponsors, trustees, insurers and reinsurers.
These are complex transactions with significant reputational and financial risk. Our strengths and experience as a multi-disciplinary commercial law firm are very well suited to their structuring and execution; we bring a robust and independent voice to the adviser team.
Many different factors influence the decision as to the right structure, the right ingredients for that structure, and the right counterparties, including: price, timing, the insurer’s requirements, trustee risk appetite and the risks being mitigated, be it longevity risk, interest and inflation, investment risk, or a combination of these.
We are leaders in the areas of scheme buy-outs and buy-ins - having advised on 4 of the 10 biggest transactions in the UK - longevity hedging and reinsurance and portfolio transfer and optimisation.
We have a deep understanding of liability transfer, what this entails, and its limitations.
We also have a market-leading insurance practice and routinely advise insurers on Solvency II optimisation work, including in relation to matching adjustment-compliant structures in respect of their existing portfolios. We have published a market-leading guide to Solvency II.
Key experience
Advising Tata Steel on the full buy-in of the British Steel Pension Scheme, achieved by phased buy-ins with Legal & General totalling £7.5 billion of liabilities – BSPS is the largest scheme in the UK to have secured full insurance.
Advising Intact and RSA Group on the £6.5 bn buy-in of two RSA Group pension schemes with Pension Insurance Corporation, the largest ever bulk annuity transaction from pension schemes to insurer.
Advising Legal & General on the insurance of £4.8bn of liabilities of Boots Pension Scheme, the UK’s largest single buy-in transaction by premium size, and multiple other buy-in transactions including Reuters Supplementary Pension Scheme, the Commonwealth Bank of Australia (UK) Staff Benefits scheme and the Pearson Pension Plan together with related reinsurance arrangements.
Advising Walmart on the £3.8 billion full buy-in and subsequent buy-out of the Asda Group Pension Scheme with Rothesay Life.
Advising Aviva on the derisking of the Aviva Staff Pension Scheme by way of an approximately £5 billion longevity hedge transaction involving insurance and reinsurance arrangements.
The necessary attributes for advising on these transactions are extensive experience of many different structures, a desire to innovate, and an ability to structure and draft for the long term. Our team has these attributes and a track record to back it up.
key Contacts
