Linklaters advises Pearson Pension Plan on the purchase of pensioner buy-in policy with Legal & General totalling c.£500m

  • Second tranche of benefits secured under umbrella buy-in policy with Legal & General with a combined total of £1.1bn.
Linklaters has advised The Pearson Pension Plan on the purchase of a further pensioner buy-in policy with Legal & General totalling c.£500m. This is the second tranche of benefits secured under the Trustee’s umbrella bulk annuity policy with Legal & General, which was put in place in 2017. Along with the Trustee’s other bulk annuity policy with Aviva, this means that approximately 95% of the Plan’s pensions in payment, or £1.8bn of liabilities, are now insured.
 
The buy-in policy from this deal:
 
  • Will make monthly payments to the Plan equal to the future pensions for a cross-section of the Plan’s current pensioners.
  • Will reduce the risk that Pearson will be required to contribute additional cash to the Plan in future, as the buy-in transfers a significant proportion of pension risk to the insurer.
  • Contains features to provide additional security for the Plan beyond the protections available as standard under the insurance regime.
The Linklaters team was led by Carol Jones, Consultant and Sarah Opie, Managing Associate from the firm’s pensions practice as well as Andrew Forde, Counsel (Financial Structuring) and Lorna Tennent, Counsel (Corporate)
 
The firm advised on the original double bulk annuity policy entered into by the Plan in 2017, and have also since advised on another double bulk annuity policy for the M&S Pension Scheme in 2018 which totalled £1.4bn of liabilities.