The transaction is made up of two parts: a £850 million buy-in and a £250 million "assured payment policy," under which L&G provides protection against changes to asset yields, interest rates and inflation.
The spokesman added that the sponsoring employer had put in place a longevity hedge, also with L&G. AIB's most recent annual report said this hedge was entered into in December 2016. The news release said this existing hedge had been converted into the buy-in.
"This transaction is another major milestone in derisking the scheme," said Norbert Bannon, chairman of the trustee, in the release. "It is the result of a collaborative process between the bank and trustee over many years, always with the clear objective of improving the security of members' benefits."
The pension fund trustees were advised by Mercer and Sackers.