L&G has secured a £1.65bn buy-in with the pension scheme of the engineering firm Wood Group.
This deal, understood to be the largest bulk annuity transaction this year, secures the benefits of all 16,400 members of the Wood Pension Plan.
The trustees of the DB scheme said this marked a significant step on its de-risking journey.
L&G says the transaction reflects a wider shift in the market, with trustees placing increasing weight not only on price and execution certainty, but also on the quality of member experience after a transaction completes.
The trustees of the Wood Pension Scheme said that L&G’s in-house administration and customer service teams were a key factor when it came to selecting an insurance partner.
LCP acted as lead transaction adviser. The Trustee was advised by Gowling WLG, Wood Group was advised by Pinsent Masons and L&G was advised by CMS.
L&G CEO institutional retirement Gareth Mee says: “Working closely with the trustee, sponsor and LCP, we were able to deliver our shared goal of securing members’ benefits and ensuring they are well supported over the long term.
“The importance placed on member experience and cultural alignment speaks directly to what L&G’s institutional retirement business has built over the last four decades: PRT expertise, a trusted brand and the experience needed to support customers well beyond the point of transaction.
“As the market continues to grow, our focus remains on using our scale and capabilities selectively to support high-quality transactions that deliver lasting value for schemes and their members.”
Wood Group head of global retirement Elaine Hanna adds: “The completion of this buy-in is an important step in securing the long-term future of the Wood Pension Plan. It provides greater certainty for our members while significantly reducing pension risk for Wood. Throughout the process, we have worked closely with the trustee, supported by our advisers and L&G, with a shared focus on achieving a positive long-term outcome for members. We’re grateful for the collaboration and commitment that has helped make this possible.”
Mervyn Walker, chair of Wood Pensions Trustee, adds: “We are delighted to have completed a buy-in with L&G after a thorough and competitive process. The buy-in is a significant milestone for the Wood Pension Plan in reducing risk and improving further the security of our members’ benefits. The Trustee’s objectives in approaching the market were to secure excellent value for money and to ensure that the outstanding service we provide to members through the Wood Pensions team would continue into the long-term future.”
LCP partner and lead transaction adviser Clive Wellsteed says: “This transaction demonstrates the value of a well-prepared and carefully managed process. We worked closely with the trustee and Wood to present the Plan clearly and compellingly to the market.
“This drove strong insurer engagement and competition on price, alongside tailored solutions to address the non-price features that mattered most to the trustee and members. From a strong final round, L&G’s proposal stood out for the way it met the Plan’s specific requirements and the wider objectives of the trustee and sponsor.”
