Leonardo Electronics Pension Scheme, Yeovil, England, insured £160 million ($199.9 million) in liabilities through a buy-in transaction with Just Group.
The deal insured the liabilities of all retirees, Michael Walker, principal consultant at Aon — an adviser on the deal — said in a telephone interview. It is the first risk transfer transaction for the £1 billion pension fund.
"It's great news that we have secured the benefits of our pensioners with Just Group and that we were able to complete the transaction despite the turbulence in markets. Our scheme is still open to accrual, but our strong funding position meant we have been able to lock down this risk at an early stage," Mike Nixon, head of pensions at Leonardo U.K., said in a news release.
The aerospace, defense and security company was advised by law firm Burges Salmon LLP and River & Mercantile Group. Just Group was advised by law firm Pinsent Masons LLP.
Separately, the £400 million NG Bailey Scheme, Ilkley, England, insured £66 million in liabilities through two buy-in deals with Just Group.
The liabilities were split between two deals. Due to attractive market pricing, an initial £49 million buy-in was followed by a £17 million buy-in transaction, Adam Davies, managing director at K3 advisory — an adviser on the deal — said in an email. In 2017, the plan insured £50 million in liabilities.
"As a proud family business with a long tradition of looking after our employees throughout their careers and into retirement, we were keen to secure the benefits of our pensioners at a cost that worked for shareholders and trustees. As family backed businesses themselves, K3 and (the trustee) Western Pension Solutions understood the importance of this, and with their close collaboration we managed to achieve a deal that had little impact on either the scheme or company's finances whilst materially reducing the risks posed by the scheme. A fantastic deal all round," Mike Porter, chief financial officer of NG Bailey, said in a news release Tuesday.
