Marvin OnumonuLegal & General Assurance Society Limited (L&G) has completed an £800m buy-in with the Honda Group – UK Pension Scheme, securing retirement benefits for over 1,700 retirees and more than 3,000 deferred members.
Honda Motor Europe Limited, the sponsor, is responsible for Honda’s European operations.
L&G provided a price lock on the scheme’s assets during the deal, giving price certainty while final terms were sorted.
The scheme paid the premium using a mix of an in-specie asset transfer and cash.
L&G also offered a partial, flexible deferred premium to help with the scheme’s illiquid assets, letting the scheme defer a significant part of the total premium.
Additionally, L&Gs in-house administration and customer care played a role, with member option factors given to the scheme during the buy-in to support the online benefit modeller.
Andrew Kail, CEO, institutional retirement at L&G, said: “This is another example of L&G’s ability to deliver for trustees, sponsors and members in all market environments.
“We are delighted to have helped the Scheme secure its members’ retirement benefits.
“What really differentiates our proposition is our ability to offer schemes a multi-award-winning customer service offering as well as bespoke transaction structuring that caters to individual schemes’ practical needs.”
Ray Runza, trustee chair, said: “The security of our members’ benefits has been our highest priority, so this transaction marks an outstanding outcome for all involved.
“The Trustee Board is delighted to see a successful outcome after a rigorous selection process across market insurers and months of dedicated preparation, and effort by all advisors.
“I’d like to thank our advisors for their collaborative work to get the Scheme to this point and look forward to working with L&G for their continued support to our members.”
EY advised both the scheme trustees and the sponsor, with Mercer as investment advisors, Hymans Robertson as section 36 advisors and XPS as the scheme actuary.
The sponsor was also advised by Isio as investment advisors.
Burges Salmon advised the trustee on legal matters, while Sackers advised the sponsor and CMS advised L&G.
Swapnil Katkar, UK financial services partner at EY, said: “We are delighted to have supported both Honda Group and the Scheme Trustees in collaboration with other advisors on this buy-in.
“This transaction demonstrated that executing a buy-in within a strict timeframe remains possible while still achieving attractive pricing and suitable contractual terms through a concerted effort.
“In addition to the standard due diligence, this transaction involved substantial and extensive review of insurers’ administrative and customer service capabilities, and we are confident that the completed deal will benefit both the savers and the UK markets.”
