British multinational financial services firm Legal & General Group has received a contract to provide bulk annuities to the TRW Pension Scheme in the UK.


Legal & General Retirement (LGR) has received a £2.5bn partial buyout with the scheme, removing these liabilities from the balance sheet of TRW Automotive and insuring more than 22,000 of the scheme’s pensioners.

The deal follows the £3bn bulk annuity buy-in arrangement with the ICI Pension Fund that the company received earlier this year, said Legal & General.

The buyout transaction will also incorporate multiple elements that were included as part of an integrated and broader risk management strategy for the scheme.

As part of the buyout process, a pension increase exchange offer will be provided to around 15,000 pensioner members and these individuals were given the option to receive a higher level of non-increasing pension income in place of inflation linked income, coupled with the security of their pension being insured with Legal & General.

In addition, TRW chose to insure the liabilities for a further 16,000 of the scheme’s pensioners with Legal & General, which is said to provide benefits for all of its UK pensioners.

Legal & General Retirement managing director Kerrigan Procter said: "We are excited to have been chosen to work with the TRW Pension Scheme, TRW Automotive and their advisers on this pioneering arrangement.

"We have worked with the Scheme over many years as they moved from Index Funds to Liability Driven Investment, and now to buyout with Legal & General."

Mercer acted as the trustee advisor for this pension scheme risk transfer project. Based in Michigan, US, TRW is an automotive parts supplier.

Image: Legal & General Retirement managing director Kerrigan Procter. Photo: courtesy of Legal & General Group plc.