Legal & General completes £1.1bn buy-in with the SCA UK Pension Plan

UK insurer Legal & General Assurance Society Limited has announced the completion of a £1.1 billion buy-in with the SCA UK Pension Plan, securing the benefits of 5,900 retirees and 3,600 deferred members.

Essity Holding UK Limited, part of the Essity group, is the sponsoring company. After evaluating various insurers, the Plan and Essity chose to partner with Legal & General for its clear and transparent pricing and terms.

Legal & General has been working with the Plan for 31 years through its Asset Management division. This deal supports the Group’s new growth strategy, announced in June, which aims to write around £50 billion of UK Pension Risk Transfer (PRT) over the next five years. In 2023, Legal & General wrote £13.7 billion of PRT globally.

The transaction helps the Plan align its investment strategy with Legal & General’s pricing. The Plan secured a price lock and premium payment portfolio aligned with its assets, including pooled fund holdings that were transferred to Legal & General, ensuring cost certainty during the transition.

Andrew Kail, CEO of Institutional Retirement at Legal & General, commented, “We are very pleased to have agreed this buy-in today with the SCA UK Pension Plan, allowing us to deepen our existing relationship with the client and create greater security for its members.

“We are continuing to see an acceleration in demand across the sector with c£1.4 trillion of DB pension scheme assets sitting on UK company balance sheets. Our long-standing relationships with clients, including through our Asset Management division, allows us to support pension schemes through their de-risking journey, working in collaboration with clients such as the SCA UK Pension Plan to maximise outcomes for Plan members and Trustees.”

Carol Woodley, Chair and Independent Trustee Director at SCA UK Pension Plan, said, “I’m delighted that the Trustees, Essity, Legal & General and our advisers have been able to work together to complete this transaction. It is good news for our members and increases the level of security that their pension benefits will be paid in full. The outcome was only possible in the time frame as a result of the great team effort between everyone involved.”

Clive Wellsteed, Partner and Lead Transaction Adviser at Lane Clark & Peacock LLP (who acted as lead transaction advisor and advised the Plan’s Trustees in all aspects), stated, “One of the most important decisions in today’s market is how to approach and engage with insurers to best deliver the transaction objectives. The bespoke process followed here did exactly that and delivered highly competitive pricing and full tailoring to the Trustee’s and Sponsor’s timeline and desired terms.”

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