Legal & General Seals Second US Pension Buyout

The insurer expands its American pension-risk transfer business with a $65 million deal with the Diocese of Palm Beach.

Legal & General (L&G) has taken on $65 million in liabilities as part of its second US pension-risk transfer (PRT) deal.

The agreement was struck with the Pension Plan for Lay Employees and Sisters and Brothers Within the Diocese of Palm Beach under the advisement of USI Consulting Group.

It follows L&G’s entry into the US market in October, when it split Philips’ $1.1 billion bulk annuity with Prudential and OneAmerica.

“The US is a key market for Legal & General and we are uniquely positioned with our US life insurance company, rapidly growing investment management business, and US pension-risk transfer operations,” said Kerrigan Procter, managing director of L&G Retirement. “I am excited to continue to build on the global success that we saw last year as we continue our push into the US market.”

As of June 2015, L&G had amassed a global annuity book of over $68 billion. The insurer took on an additional $450 million as part of the Philips buyout in October.

While pension-risk transfers have yet to be widely adopted in the US—transactions between 2007 and June 2015 totaled just $67 billion, compared to $180 billion in risk-transfer deals over that time period in the UK, according to Prudential—the demand for PRT deals in the US is “rapidly increasing,” said George Palms, president of L&G Retirement America.

“This is another important milestone in our US pension-risk transfer business,” Palms continued. “We are confident that we are strongly positioned to be a major player in this growing market.”

As part of the buyout, L&G Retirement America will administer the payments to Diocese pension annuitants. L&G Investment Management America will manage the assets.

Related: L&G American Takes on PRT Market, Inking Major Pension Buyout & Pension Risk Transfers Climb to $260B