Legal & General finalizes record £4.8 billion Boots pension deal

LONDON – Legal & General Group (LON:) plc (L&G) has completed a landmark £4.8 billion full buy-in with the Boots Pension Scheme today, marking the largest single UK pension risk transfer by premium size. This transaction ensures the financial security of all 53,000 scheme members and represents a significant milestone in the scheme’s de-risking journey that began in 2001.

The deal, which has been in the making for over two decades of investment management services provided by L&G to the Scheme, was facilitated by strategic advisors and Aon (NYSE:), with legal counsel from Baker McKenzie, Sackers, Slaughter and May, and Simmons & Simmons. Andrew Kail of L&G Retirement Institutional hailed the transaction as a testament to its scale and impact on the pensions industry.

Alan Baker from Law Debenture praised the enhanced protection this agreement offers to member benefits, mitigating the risk of market volatility. Meanwhile, Sebastian James of Boots acknowledged the deal’s role in delivering certainty to both scheme members and the company.

With this latest buy-in, L&G’s year-to-date global Pension Risk Transfer (PRT) business has reached an impressive £13.4 billion. The UK market contributed significantly with £7.2 billion, alongside $1.5 billion from US markets. Since 2018, L&G has written a total PRT volume of £59.6 billion, demonstrating strong market demand driven by increasing pension funding ratios.

The robust solvency ratio maintained by L&G even after this substantial transaction underlines the company’s strong financial position, potentially paving the way for future investments or enhanced shareholder dividends. This historic agreement stands as a clear indicator of L&G’s prominent role in the UK’s pension landscape and its commitment to securing retiree benefits against an ever-changing economic backdrop.

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