The Honda Group – UK Pension Scheme has completed a bulk purchase annuity buy-In with Legal & General. The deal, worth $800m, secures the retirement benefits of over 1,700 retirees and over 3,000 deferred members.
The scheme paid the premium through a combination of an in-specie asset transfer and cash, with L&G also providing a partial, flexible deferred premium solution to support the run off of the scheme’s illiquid asset holdings over the coming years. This solution enables schemes to defer a significant proportion of a transaction’s total premium, providing greater optionality during a transaction process.
“The security of our members’ benefits has been our highest priority, so this transaction marks an outstanding outcome for all involved. The trustee board is delighted to see a successful outcome after a rigorous selection process across market insurers and months of dedicated preparation, and effort by all advisors. I’d like to thank our advisors for their collaborative work to get the scheme to this point and look forward to working with L&G for their continued support to our members,” said Ray Runza, Trustee Chair.
“This is another example of L&G’s ability to deliver for trustees, sponsors and members in all market environments. We are delighted to have helped the scheme secure its members’ retirement benefits. What really differentiates our proposition is our ability to offer schemes a multi-award-winning customer service offering as well as bespoke transaction structuring that caters to individual schemes’ practical needs,” said Andrew Kail, CEO, Institutional Retirement at L&G.
The scheme trustees and the sponsor were jointly advised by EY, while the trustees were further advised by Mercer as investment advisors, Hymans Robertson as section 36 advisors and XPS as the scheme actuary, while the sponsor was further advised by Isio as investment advisors. Burges Salmon provided legal advice to the trustee, Sackers provided legal advice to the sponsor and CMS provided legal advice to L&G.
“We are delighted to have supported both Honda Group and the scheme trustees in collaboration with other advisors on this buy-in. This transaction demonstrated that executing a buy-in within a strict timeframe remains possible while still achieving attractive pricing and suitable contractual terms through a concerted effort. In addition to the standard due diligence, this transaction involved substantial and extensive review of insurers’ administrative and customer service capabilities, and we are confident that the completed deal will benefit both the savers and the UK markets,” said Swapnil Katkar, UK Financial Services Partner at EY.
