The TI Group Pension Scheme with the support of its sponsor, Smiths Group, has chosen to insure a portfolio of its pensions in payment with Legal & General.
The transaction involved approximately GBP250 million of assets being transferred to Legal & General in return for which Legal & General will make the regular annuity payments to the scheme.
The annuity purchase is an investment by the TI Group Pension Scheme involving approximately 20% of its assets. Current and future scheme pensioners will see no change in their benefits or the way in which they are paid.
Simon Gadd, managing director of annuities business at Legal & General, said: We are seeing a significant increase in the number of trustee bodies considering options to reduce the risks involved in running their pension schemes.
Mike Abrams, director of UK pensions at TI Group, added: Scheme members will see no change in the amount of their benefits or the way in which they are paid as a result of this investment. The trustee chose to purchase annuities to match a portion of the scheme’s liabilities, the aim being to reduce the effect of changing investment and mortality conditions on the scheme’s funding position, so providing greater security and stability in the funding of all members’ benefits.