Legal & General has completed a £500m buy-in transaction with the Pearson Pension Plan, covering around 2,200 ezisting pensioner members.
In 2017, Legal & General provided a £600m pension buy-in with the Pearson Pension Plan, covering around 2,400 members.
The new £500m transaction, alongside the 2017 buy-in, increases the insurance protection to around 50% of the Pearson Pension Plan’s liabilities.
The earlier buy-in agreement in 2017 was established as an umbrella contract, enabling for future buy-in transactions to be carried out using similar pre-agreed terms. It allows the Trustee to move quickly when the appropriate conditions allowed.
Legal & General UK pension risk transfer managing director Chris DeMarco said: “We are delighted to have been able to partner with the Plan to further improve the security of members’ benefits. This transaction was carried out under the comprehensive umbrella contract established in 2017 alongside our first buy-in transaction with the Plan, which enabled smooth execution of this follow up transaction over a short timeframe.
“Our longstanding relationship with the Plan across our business and wide-ranging expertise in respect of these structures have been important factors in developing this solution to meet the needs of the Trustee and the Plan’s members.”
Last month, the company signed an agreement with NatWest to offer its lifetime mortgages, including its Optional Payment Lifetime Mortgage (OPLM) as a potential solution for NatWest interest-only borrowers aged 55 and above who are at the end of their mortgage term and unable to repay their loan.
The agreement adds to the existing agreements with Virgin Money, Santander and The Co-operative Bank.
NatWest will offer interest-only customers who could benefit from the opportunity by speaking with Legal & General’s specialist partner for advice on whether lifetime mortgage is suitable for them.
Along with NatWest customers, other Royal Bank of Scotland customers will also be included in the scheme.
Legal & General noted that this agreement follows Financial Conduct Authority’s call on the mortgage industry to provide more options for interest-only borrowers.