Legal & General finalises Nortel pension buyout

UK insurer Legal & General Assurance Society Limited has successfully completed a buyout with the Nortel Networks UK Pension Plan, which belonged to the now-bankrupt telecommunications company Nortel Networks.

This latest agreement secures the benefits for the remaining Plan members, involving an initial premium of £14 million and an additional £6 million on completion. To date, Legal & General has insured liabilities totalling £2.5 billion for the Plan.

The Plan’s sponsor entered administration in 2009, leading to a Pension Protection Fund (PPF) assessment. During this period, the Plan secured significant additional funds from the Nortel insolvency proceedings, enhancing member benefits.

The initial transaction with Legal & General occurred in 2018, covering £2.4 billion to secure benefits above PPF levels. This included a provision for additional benefits upon receiving further recoveries from the Nortel insolvency, followed by a £105 million buyout in 2021.

Isio advised the Trustee on the transaction, with WTW acting as scheme actuary. Legal advice was provided by Travers Smith and Pinsent Masons, while PWC and Hogan Lovells offered guidance on financial recoveries. Clifford Chance provided legal counsel to Legal & General.

“This transaction marks a significant milestone in the Plan’s journey since 2009 and is testament to the work carried out by the trustee board and their advisors to secure funds from the insolvency process. The collaboration, flexibility and foresight shown by all parties enabled the Plan to complete a ground-breaking initial transaction in 2018 with the ability to secure additional benefits through follow up transactions. We are proud to be providing financial security and certainty to Plan members,” added Dominic Moret, Head of Origination and Execution, UK PRT, Legal & General Retirement Institutional.

“These transactions serve as excellent examples of the positive role that insurers are playing in securing, protecting and delivering pensions in the UK.”

Clive Gilchrist, Chair of Trustees commented: “I am delighted that after fifteen years of hard work by the trustee board and advisers we have completed the final buy out, having successfully recovered significant funds to provide members with benefits well above PPF levels. I would like to thank everyone concerned for their efforts.”

This website states: The content on this site is sourced from the internet. If there is any infringement, please contact us and we will handle it promptly.