17 June 2021
LCP has been lead adviser to the QinetiQ Pension Scheme (the “Scheme”) on their £130m buy-in transaction with Legal & General Assurance Society Limited (“Legal & General”), covering the pension benefits for over 390 new retirees since a previous pensioner buy-in in April 2019.
LCP was appointed to the Trustee as a specialist de-risking adviser, acting as lead adviser for the transaction. Legal advice was provided to the Trustee by Burges Salmon and to Legal & General by Clifford Chance.
This announcement marks the Scheme’s first transaction with Legal & General. As part of the agreement, an umbrella contract was established, which enables future transactions with Legal & General to be completed quickly and easily on the same pre-agreed terms when favourable pricing opportunities arise.
The Scheme completed a £690m pensioner buy-in with Scottish Widows in April 2019 which covered all pensioners at that time. Read about it here: LCP advises on QinetiQ pension scheme buy-in with Scottish Widows | Lane Clark & Peacock LLP
David Stewart, Partner, LCP
“We are delighted to have advised the Trustee in their next step on their de-risking journey. In our role as specialist de-risking adviser we helped the Trustee put a second umbrella contract in place, adding Legal & General to their panel of insurers. The Scheme joins the growing list of large pension schemes such as M&S, Pearson and ICI, with umbrella contracts in place with multiple insurers, enabling them to move quickly when favourable conditions arise whilst maintaining competitive tension.”
Lisa Mundy for BESTrustees which acts as Chair of Trustees
“This further step on the Scheme’s journey increases the security of the benefits of all our Scheme members. With the support from our advisers, the Trustee was able to reduce the risks in the Scheme whilst also expanding our framework for future de-risking.”
Andy Ryan, Pricing Strategy Director, Legal & General Retirement Institutional
“This transaction demonstrates how an effective umbrella contract can be agreed as part of a Scheme’s de-risking journey to enable efficient follow-on transactions. We look forward to continuing to build on our relationship with the Scheme and work with the Trustee to provide further security for the pension scheme members.”