National Grid U.K. Pension Scheme, Binfield, England, insured £1.6 billion ($2 billion) in liabilities through a buy-in with Legal & General Assurance Society, according to the pension fund's website.
Following its first risk transfer deal in October, when the £20 billion pension fund for employees of the electric and natural gas company insured £2.8 billion in section A liabilities with Rothesay Life, the buy-in announced Tuesday covers the liabilities of section B participants.
"All parties have worked collaboratively to reach this positive outcome, which further protects the security of our members' benefits," Donald Simpson, trustee and chair of the funding and investment committee and National Grid U.K. Pension Scheme, said Tuesday in a news release.
National Grid Chief Financial Officer Andy Agg said the deal "represents a further step in our long-term pensions strategy, and reduces the exposure to long-term pensions risks for National Grid and gas consumers."
The National Grid buy-ins followed other mega deals from U.K. insurers, including Rothesay, which recently insured the liabilities of Telent and Pernod Ricard's pension funds in a $5.8 billion buyout and a $4.7 billion buy-in, respectively. Telent insured majority of the £4.7 billion plan's assets, while Pernod Ricard's deal saw the largest ever number of participants — 10,000 — who have yet to retire.
