Legal & General (L&G) has completed a £1.6bn buy-in with the National Grid UK Pension Scheme.

The pension risk transfer deal is for Section B of the scheme and covers 6,000 members.

The National Grid UK Pension Scheme is a 100,000 member, £20bn defined benefit pension scheme that is closed to new members and consists mostly of previous employees of the gas industry.

Commenting on the transaction, National Grid UK Pension Scheme trustee and chair of the Funding and Investment Committee, Donald Simpson, said: “We are pleased to take another step in our de-risking journey.

“All parties have worked collaboratively to reach this positive outcome, which further protects the security of our members’ benefits.”

National Grid CFO, Andy Agg, added: “This represents a further step in our long-term pensions strategy, and reduces the exposure to long-term pensions risks for National Grid and gas consumers.”

L&G Retirement Institutional CEO, Laura Mason, said that the firm was “delighted” to have been able to work with the trustees in completing the deal.

She continued: “We were pleased to have been able to leverage our existing asset management mandate with the scheme to ensure a smooth process and provide further security to the scheme members.”

The scheme trustees were advised by Aon and the scheme’s in-house team, while Sackers provided legal advice and Willis Towers Watson provided actuarial support.

L&G was advised on the deal by Macfarlanes.

Aon senior partner, Martin Bird, stated: “We are proud to continue supporting the trustees and National Grid in navigating through a busy bulk annuity market.

“This transaction further underlines the importance of having a robust trustee decision-making framework and ability to move quickly when opportunities arise.”

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