Tata Steel reinforces British Steel Pension Scheme with $2.4 billion buy-in

British Steel Pension Scheme, Glasgow, Scotland, completed its third buy-in deal with Legal & General, insuring £2 billion ($2.4 billion) in liabilities.

The latest deal insures about 30% of liabilities, bringing the total secured to around 60%, the corporate sponsor, Tata Steel U.K., said in a news release.

The pension fund had a net surplus of about £1.5 billion as of Sept. 30, and the funding level improved in the fall, when interest-rate increases and unfunded tax proposals caused volatility in U.K. markets. The funding level could not immediately be learned.

The trustees had already insured a total £2.8 billion with L&G, through a buy-in in May to insure 25% of liabilities and a buy-in in November 2021 to cover 5% of liabilities.

Tata Steel said the sponsoring employer is "fully supportive of the trustee" having insured about 60% of liabilities, and expects to complete a buy-in to cover the remaining roughly 40% of liabilities in the first half of this year, depending on market conditions.

The BSPS trustees appointed Legal & General Investment Management in July to run £9.9 billion in defined benefit plan assets. The deal involved the transfer of both the assets and in-house staff to LGIM. At the time of the announcement, BSPS said no decision had been made as to who would move to LGIM, including CIO Hugh Smart.

A spokeswoman for BSPS could not immediately be reached to comment.