QinetiQ Pension Scheme completes £130m buy-in with L&G

The QinetiQ Pension Scheme has completed a £130m buy-in with Legal & General (L&G) Assurance Society Limited, covering the benefits of over 390 new retirees.

The agreement also follows a previous £690m pensioner buy-in completed by the scheme in April 2019, which covered the benefits for all pensioners in the scheme at the time.

Whilst this is the scheme’s first buy-in transaction with L&G, an umbrella contract was established as part of the agreement, which enables future transactions with L&G to be completed on the same pre-agreed terms when favourable pricing opportunities arise.

The trustee also appointed LCP as a specialist de-risking adviser, with the provider acting as the lead adviser for the transaction, while legal advice was provided to the trustee by Burges Salmon and to L&G by Clifford Chance.

BestTrustees, which acts as chair of trustees, trustee executive, Lisa Mundy, highlighted the deal as a "further step on the scheme’s journey", increasing the security of the benefits of all our scheme members.

“With the support from our advisers, the trustee was able to reduce the risks in the scheme whilst also expanding our framework for future de-risking," she stated.

Also commenting on the deal, L&G Retirement Institutional pricing strategy director, Andy Ryan, said: “This transaction demonstrates how an effective umbrella contract can be agreed as part of a pension scheme’s de-risking journey to enable efficient follow-on transactions.

“We look forward to continuing to build on our relationship with the scheme and work with the trustee to provide further security to scheme members.”

LCP partner, David Stewart, added: “We are delighted to have advised the trustee in their next step on their de-risking journey.

“In our role as specialist de-risking adviser we helped the trustee put a second umbrella contract in place, adding L&G to their panel of insurers.

“The scheme joins the growing list of large pension schemes, with umbrella contracts in place with multiple insurers, enabling them to move quickly when favourable conditions arise whilst maintaining competitive tension.”

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