Nortel Networks UK Pension Trust Ltd., Surrey, England, insured £105 million ($145 million) in liabilities through a buyout with Legal & General Assurance Society, confirmed Clive Gilchrist, chairman of the plan's trustees.
The transaction is the second buyout deal for the plan and it covers the benefits of 8,200 retirees and 4,300 plan participants who are yet to retire.
Through the previous buyout in 2018 — also with L&G — Nortel insured £2.4 billion in liabilities.
The plan's derisking journey follows the 2009 insolvency of its plan sponsor Nortel Networks U.K. The plan then entered the lifeboat fund for defined benefit plans of U.K. insolvent employers, the £36 billion Pension Protection Fund, London.
The first buyout was secured using recoveries from the sponsor's insolvency proceedings.
"Since 2009 we have worked with our advisers with the objective of improving outcomes for all of our members, first through maximizing recoveries from Nortel's worldwide insolvency proceedings and then implementing a completely new approach to securing benefits in a PPF-plus scenario," Mr. Gilchrist said in a L&G news release. "We're now one step closer to completing this journey and we look forward to working with our advisers and Legal & General to secure further benefits with the remaining funds left in the plan."
The trustee was advised on the transaction by consultant Isio and law firm Travers Smith. Eversheds Sutherland provided legal advice to the insurer.
Mr. Gilchrist also confirmed that the remaining liabilities are expected to be insured at some point in the future. The plan has £100 million in assets.
