One of the year’s biggest deals comes as XPS predicts pricing improvements for schemes exploring buy-ins.
The SCA scheme, sponsored by Swedish health and hygiene product manufacturer Essity, transferred the bulk of its assets to L&G’s asset management arm ahead of the deal.
This allowed the scheme to align its investment strategy with the insurer’s pricing, while also ensuring cost certainty.
The transaction is one of the biggest announced so far this year, second only to Pension Insurance Corporation’s £1.2bn deal with the Total Energies UK Pension Plan last month.
Clive Wellsteed, partner at LCP and lead adviser on the transaction, said: “One of the most important decisions in today’s market is how to approach and engage with insurers to best deliver the transaction objectives. The bespoke process followed here did exactly that and delivered highly competitive pricing and full tailoring to the trustees’ and sponsor’s timeline and desired terms.”
The SCA trustees and Essity – which is responsible for brands including Cushelle, Plenty and Bodyform – worked together on researching the insurer market before selecting L&G, citing its cost certainty and transparency.
Carol Woodley, independent chair of the SCA UK Pension Plan, said: “[The buy-in] is good news for our members and increases the level of security that their pension benefits will be paid in full. The outcome was only possible in the time frame as a result of the great team effort between everyone involved.”
Andrew Kail, CEO of L&G’s Institutional Retirement arm, highlighted the role of long-standing relationships in securing large transactions. The SCA scheme has been a client of L&G’s asset management business for more than 30 years.
Earlier this year L&G announced a strategic restructure and targeted writing £50bn to £65bn of new pension risk transfer business over the next five years.
Further reading
PIC seals biggest buy-in of the year with £1.2bn TotalEnergies deal (3 July 2024)
The changing face of bulk annuities (19 February 2024)
