Legal & General secures £370m buy-in for TUI Group UK Pension Trust

Legal & General Assurance Society Limited, a leading UK pension risk transfer provider, has completed a £370 million buy-in for the BAL section of the TUI Group UK Pension Trust (“the Scheme”).

TUI Group, a global leisure, travel, and tourism company, sponsors the Scheme. This latest transaction, finalised in late 2024, follows an initial £610 million buy-in in 2021, fully securing all benefits within the section.

The Scheme’s Trustee collaborated with Legal & General over an 18-month period, monitoring pricing to ensure they could act on favorable market conditions. This strategy allowed for an efficient and cost-effective transaction while maintaining affordability.

As part of the agreement, approximately £30 million of the premium has been deferred, enabling the Scheme to manage illiquid assets, with payments scheduled over the next two years.

Adrian Somerfield, Director, Institutional Retirement, Legal & General, commented: “We are pleased that the Trustee has chosen to secure all section benefits with us. Working collaboratively with the Trustee, Sponsor and their advisors, we helped implement an efficient solution for the Scheme’s illiquid investments and now look forward to supporting the members over the long term.”

This marks the third transaction between the Scheme and Legal & General, following a £184 million full buy-in for the TAPS section.

Mike Roberts, PAN Trustees Partner, Chair of Trustee, said: “Securing the benefits for our members has been the aim of the Trustee for many years, and we are delighted to have achieved another successful transaction. This is a prime example of how collaboration between all parties can get the best outcome for members of the Scheme.”

Imogen Cothay, Partner, LCP, added: “This latest transaction represents a significant milestone, with all members’ benefits in the section now insured in full. Having advised the Trustee since 2011, it has been a pleasure to support the Trustee in its collaboration with TUI UK to develop and implement a long-term plan for the Scheme, and to have seen this achieved so successfully.”

LCP acted as the lead transaction adviser to the Trustee, also providing actuarial and investment guidance. Legal counsel was provided by Linklaters for the Trustee, while Isio and Herbert Smith Freehills advised the Sponsor. Macfarlanes served as legal advisers to Legal & General.

Nick Dunk, Group Pensions Manager, TUI, said: “Following a collaborative process working with the Trustee, we are pleased to have completed a further transaction in respect of the Trust as part of our de-risking journey. We have now worked to fully insure the liabilities of two Sections of the Trust which provides further security for both members and TUI.”

Carol Jones, Consultant, Linklaters, said: “We are very pleased to have worked closely with the Trustee once again to successfully close a further pension risk transfer transaction with Legal & General which enhances the security of all members’ benefits in the BAL Section of the Trust, and delivers on the long-term strategic goals developed by the Trustee and TUI.”

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