London Stock Exchange Group Pension Scheme completed a £335 million ($410 million) buy-in with Standard Life, the parties involved reported Oct. 11.
The transaction was completed in May and covers 1,740 participants in the LSE and London Clearing House sections of the pension fund.
Georgina Wallis, LSE defined benefit pensions director, in a joint statement called the deal a "significant milestone" in the group's long-term pension strategy.
Rhian Littlewood, senior business development manager at Standard Life, said in the joint news statement that increased funding levels positioned the pension fund well to explore a bulk purchase annuity deal.
Aon acted as lead adviser. Legal advice was provided to pension fund trustees by Eversheds Sutherland and investment advice by Redington, while Standard Life was advised by Herbert Smith Freehills and ITM, respectively.
Mohamed Fazal, managing director at Redington, said in a separate statement that the firm began working with plan trustees in 2017 to accomplish the transaction. "For LSEGPS, this meant carefully restructuring the portfolio with a particular focus on reducing risk opportunistically and unlocking liquidity in preparation for buy-in," he said.
The bulk purchase annuity market in the U.K. "is seeing heightened levels of demand due to higher interest rates narrowing the funding gap of many defined benefit schemes," Littlewood said, and in the first half of 2023, Standard Life had record activity, writing premiums of £3.2 billion.
