The Nortel Networks UK Pension Plan has completed its third and final buyout with Legal & General (L&G), with £2.5bn of the plan's liabilities now insured with L&G.

The deal, which consisted of a £14m initial premium and followed by a £6m top-up, marks the third buyout between the Nortel Networks UK Pension Plan and L&G, following two previous deals completed in 2018 and 2021.

The scheme had entered the Pension Protection Fund (PPF) assessment period after the sponsor went insolvent in 2009, but left after the trustee was able to secure additional funding from the Nortel insolvency process to improve member benefits.

This allowed the scheme to agree its first transaction with L&G in 2018, securing members benefits in excess of PPF levels in a £2.4bn buyout, followed by a further £105m buyout with L&G in 2021.

Isio advised the trustee on the latest transaction, while WTW acted as scheme actuary and Travers Smith and Pinsent Masons provided legal advice.

PwC and Hogan Lovells provided advice regarding financial recoveries for the scheme. Legal & General received legal advice from Clifford Chance.

Commenting on the deal, Nortel Networks UK Pension Plan chair of trustees, Clive Gilchrist, said: “I am delighted that after fifteen years of hard work by the trustee board and advisers we have completed the final buy out, having successfully recovered significant funds to provide members with benefits well above PPF levels.

“I would like to thank everyone concerned for their efforts.”

Adding to this, L&G Retirement Institutional head of origination and execution UK PRT, Dominic Moret, said: “This transaction marks a significant milestone in the plan’s journey since 2009 and is testament to the work carried out by the trustee board and their advisors to secure funds from the insolvency process.

“The collaboration, flexibility and foresight shown by all parties enabled the plan to complete a ground-breaking initial transaction in 2018 with the ability to secure additional benefits through follow up transactions.”

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