Plus, Just Group completes £18m full buy-in with St Modwen scheme covering 270 members.
It is the third transaction that the DB (UK) Pension Scheme has carried out with L&G as part of an ‘umbrella’ agreement, following buy-ins in 2021 and 2023 worth £570m and £500m respectively.
The Deutsche Bank scheme has insured more than £2bn of pension liabilities with L&G through the agreement, which established high-level commercial terms to enable a phased buy-in of the full scheme.
Other schemes to have used such an agreement include the ICI Pension Fund, which has insured 70% of its liabilities this way following a £900m transaction earlier this year.
The scheme is also a client of L&G’s asset management division, L&G Investment Management (LGIM). Eight other LGIM clients also completed bulk annuity transactions with the insurance company in the third quarter of 2024, it said in a statement.
Smaller pension schemes such as the John Graham (Dromore) Limited Pension and Life Assurance Scheme and the Contship Containerlines Limited 1979 Pension Scheme have also moved from being LGIM clients to securing a buy-in with L&G using a price-lock mechanism.
In its half-year results, the insurer said it was in exclusive negotiations with clients on bulk annuity deals worth a total of £5bn. Since then, it has completed three of these deals worth a combined £2.3bn, not including the Deutsche Bank scheme.
L&G aims to write between £50bn and £65bn of new bulk annuity business by the end of 2028.
Michael Wrobel, chair of the DB (UK) Pension Scheme’s trustee board, said: “The scheme has reached its long-term target significantly ahead of the plan we set in 2018. The existing relationship with Legal & General has been fundamental in helping us achieve this and allowed us to move quickly to lock in attractive pricing for this and previous transactions.”
Jeremy Sowden, head of global pension and benefits at Deutsche Bank, added: “The bank and trustee took the opportunity presented by market conditions to fully insure accrued liabilities much earlier than previously planned and the resulting successful transaction represents an important milestone in our global strategy to manage defined benefit scheme risk.”
Charlie Finch, partner at LCP, which advised on the transaction, said the project was “a textbook example of a successful phased buy-in strategy”.
“The preparation work and strong insurer relationships have been fundamental in allowing the scheme to execute buy-ins at highly attractive pricing and move quickly to complete a complex final transaction,” he said.
St Modwen secures full scheme buy-in
Housebuilder St Modwen has insured its defined benefit pension scheme for £18m with Just Group.
The deal protects the benefits of 215 pensioners and 55 deferred members of the scheme.
Ross Breckon, business development manager at Just Group, said St Modwen’s trustees used the insurer’s quotation and price monitoring service, Beacon, to trigger execution of the deal when the price reached a pre-agreed target range.
Tiziana Perrella, a professional trustee at Dalriada, which was the sole trustee provider for the scheme, said: “The market continues to provide evidence that attractive pricing is within reach of schemes of all sizes, if they have been suitably prepared and the process is well managed.”
