The Mitchells & Butlers Executive Pension Plan has agreed a £650m full scheme buy-in with Legal & General (L&G).

All scheme members are covered by the transaction, which is the scheme’s first pension risk transfer deal following two months of preparation and price monitoring.

The scheme already had a relationship with L&G, as its investment management business, L&G Investment Management (LGIM), provides management of the scheme’s defined contribution (DC) pension assets.

XPS Pensions Group advised the trustees on the transaction, while Gowling WLG provided them with legal advice.

L&G was given legal advice by Macfarlanes.

According to XPS, the deal brings the total volume of bulk annuity deals in 2021 to an estimated £31bn.

The firm noted that the total volume of deals had been volatile due to many transactions being ‘squeezed’ into the last few weeks of the year, with some deals still in progress that may run into the New Year.

“With hindsight it is clear that the end of 2021 has been the most active period the UK bulk annuity market has ever seen, with at least one insurer telling us the amount of business they have transacted in the last 2 months has exceeded the previous 10 months of the year,” stated XPS Pensions Group head of risk transfer, Harry Harper.

“2022 is now looking likely to be an extremely active year for bulk transactions.”

Commenting on the deal, Mitchells & Butlers Executive Pension Plan chairman of trustees, Jonathan Duck, said: “The trustees are delighted to have concluded this bulk annuity buy-in with Legal & General.

"The transaction further secures all members’ benefits as well as giving M&B plc, the plan sponsor, certainty on its future financial commitments. It is a great deal for all parties.

“I would like to thank the trustees’ advisers and M&B plc for their steadfast support over the years, which has ultimately made this buy-in possible.”

L&G Retirement Institutional director, Celia Monteiro, added: “We are delighted to have been able to help the Mitchells & Butlers Executive Pension Plan secure their members’ benefits with us.

“We worked flexibly with the trustees over a period of two years to monitor pricing and then helped them to move quickly once a transaction became affordable.

“This approach demonstrates the value that can be realised by engaging with insurers at an early stage and working with them to achieve a clearly defined pricing target.”

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