The London Stock Exchange (LSE) Pension Scheme has completed a full-scheme buy-in with Standard Life.
The deal relates to both sections of the LSE Pension Scheme – the LSE section and the LCH section – and will see benefits secured for its 1,740 members.
Georgina Wallis, defined benefit (DB) pensions director at LSE, called the deal a “significant milestone” in the group’s long-term pension strategy.
She said: “We are delighted to have achieved this result for the scheme which was a product of the collective efforts of the trustee, LSEG, their advisers and Standard Life.”
Catherine Redmond, chair of the trustee and Bestrustees trustee executive, added that the transaction provides “greater certainty” for LSE pension scheme members and reduces the risks in the scheme.
She said: “We appreciate the support from the sponsor throughout the scheme’s journey as well as the guidance from our advisers in taking this next step on our de-risking journey, and helping us achieve our long-term goal of being fully insured.”
According to Standard Life’s senior business development manager, Rhian Littlewood, the transaction was made possible through “exceptional” collaboration and engagement between all parties involved, working together to identify solutions that best matched the specific de-risking requirements of the scheme.
“Increased funding levels meant that the scheme was well positioned to explore how to reduce its risks through a bulk-purchase annuity deal,” he said, adding that through this collective effort, the scheme was able to seize an ideal market opportunity, resulting in a smooth and efficient process.
“The bulk-purchase annuity (BPA) market is seeing heightened levels of demand due to higher interest rates narrowing the funding gap of many defined benefit schemes. This is reflected in our record H1 2023 BPA activity, having written premiums totalling £3.2bn,” Littlewood added.
Aon acted as the lead adviser for the transaction, while legal advice was provided to the trustees by Eversheds Sutherland and investment advice by Redington.
Standard Life was advised by Herbert Smith Freehills and ITM.
Due to the increased demand in the BPA market, advisers on the transaction emphasised the importance of collaboration in the deal.
Charlotte Quarmby, partner in Aon’s risk settlement group, said the transaction demonstrates that, despite a busy market, bespoke solutions can still be developed to meet client needs.
“By carefully engaging with insurers and having clarity from the trustee on what was needed, we were able to help the scheme achieve an attractive outcome with Standard Life and to meet their objectives.”
This view was echoed by Mohamed Fazal, head of client solutions at Redington: “In an increasingly competitive market, this is the perfect example of how careful planning based around a shared vision can enable schemes to continue accessing attractive de-risking opportunities.”
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