Legal & General Group has secured a £4.4bn buy-in for Airways Pension Scheme (APS), the pension scheme of British Airways, which covers about 22,000 pensioners.


Image: Legal & General has completed a £4.4bn pension scheme deal with British Airways. Photo: courtesy of Legal & General Group Plc.

According to Legal & General, the deal is the largest ever bulk annuity policy arranged with a UK pension scheme. The transaction also involved the conversion of existing longevity insurance into a bulk annuity.

Legal & General retirement institutional CEO Laura Mason said: “This is a great example of Legal & General delivering for UK companies and their pension members, enabling pension schemes to provide security to their pensioners in retirement.

“This transaction also included the conversion of existing longevity insurance to a bulk annuity, demonstrating Legal & General’s ability to deal with a complex situation and offer innovative solutions drawing on the broad experience and capabilities of the wider Legal & General Group.”

During the announcement of half year results, Legal & General said that the UK pension risk transfer (PRT) market continues to show a high level of activity with the company quoting on over £20bn actively. Out of this, over £7bn were in exclusive negotiations at the time, said the company.

Following the announcement of the half year results, the British financial services company has closed £4.8bn of UK PRT transactions. Included in these is the APS buy-in, said the company which claims to be quoting actively on £27bn of UK PRT deals.

In addition, the company claims to have shown continued strong momentum in global PRT by closing £191m of deals since the end of June.

Legal & General Group CEO Nigel Wilson said: “We are actively quoting on £27 billion of UK PRT deals demonstrating the strong demand for insurance, supported by increasing affordability, as trustees seek to improve security for members and companies look to remove legacy liabilities.

“Legal & General’s combination of longevity and investment management expertise uniquely positions us to deliver at scale, providing solutions that benefit schemes and their members.”

Overall, the company has closed £6bn of international pension de-risking transactions year to date. It said that the financial metrics and Solvency II capital strain of the deals align with previous levels reported by it.