The Nortel Networks UK Pension Plan has agreed a £105m buyout with Legal & General Assurance Society, securing additional benefits for around 8,200 retirees and 4,300 deferred members.

This is the second buyout the scheme has completed with Legal & General, having agreed a £2.4bn buyout in 2018, which covered 22,700 scheme members

The scheme had previously entered a Pension Protection Fund (PPF) assessment period after its sponsor entered administration in 2009, although it has since seen additional recoveries through the sponsor’s insolvency proceedings.

Some of these funds were used to facilitate the latest transaction, providing additional benefits to plan members on terms that were agreed alongside the original transaction, with a further deal "likely" to follow in the future.

The trustee received advice on the transaction from Isio, whilst legal advice was provided to the trustee by Travers Smith, and to Legal & General by Eversheds Sutherland.

Trustee chair, Clive Gilchrist, highlighted the completion of this second buyout deal as a "significant milestone" in what has been more than a 12 year process.

“Since 2009 we have worked with our advisers with the objective of improving outcomes for all of our members, first through maximising recoveries from Nortel’s worldwide insolvency proceedings and then implementing a completely new approach to securing benefits in a PPF+ scenario," he continued.

“We’re now one step closer to completing this journey and we look forward to working with our advisers and Legal & General to secure further benefits with the remaining funds left in the plan.”

Legal & General Retirement Institutional origination and execution director, Rachel Cutts, commented: “The success of this transaction is a direct result of the solutions-driven framework that we put in place in 2018 in collaboration with the trustee and its advisers, which has now allowed us to further enhance the benefits for so many of Nortel’s pension plan members.

“It’s another important milestone for the plan and we look forward to continuing to work with the trustee to complete its journey from PPF assessment to fully securing benefits above PPF levels for its members.

“This transaction builds on Legal & General’s track record of structuring and delivering beneficial outcomes for members of pension schemes that enter PPF assessment.”

Isio partner, Lee Jagger, added: “We are delighted to have completed this second transaction, securing further benefits for members of the Nortel Pension Plan on excellent terms.

“When companies fail and their pension schemes move into the PPF, it’s a time of great uncertainty and stress for their members.

"Therefore, we are extremely proud that our approach to securing PPF+ benefits provides choice, flexibility and crucially delivers the most value into members’ pockets.”

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