Legal & General Group PLC announced Monday the completion of a 4.6-billion-pound ($6.14-billion) annuity buy-in transaction with multiple pension funds from the Ford Motor Co.
The transaction, the largest U.K. pension risk transfer deal announced this year, will secure retirement benefits for 35,000 members of Ford’s pension schemes, including the Ford Hourly Paid Contributory Pension Fund and the Ford Salaried Contributory Pension Fund.
The transaction is also the second largest PRT deal that L&G has completed, just shy of the 4.8-billion-pound full-buy-in transaction with the Boots Pension Scheme, completed in November 2023. Year to date, L&G has completed 11 billion pounds in PRT volume.
“This £4.6bn transaction puts us firmly on track to achieve our PRT growth targets,” said Legal & General CEO António Simões in a statement. “Our long-term relationship with Ford is a great example of the competitive edge that comes from the synergies between L&G’s businesses, and the ongoing value this creates for trustees, sponsors and pension scheme members.”
In 2023, the Ford Pension Scheme for Senior Staff completed a 340-million-pound buy-in with insurer Scottish Widows. In 2012, Ford closed its U.K. defined benefit plans to new employees.
Volume in the U.K. PRT market has been driven by large corporate pension funding surpluses. The Pension Protection Fund 7800 Index, which tracks the funding ratios of nearly 5,000 U.K. corporate pension schemes, was 129.8% in October—representing a 255-billion-pound surplus of assets.
In a statement, Legal & General projected that the U.K. PRT market will total 50 billion pounds in 2026, similar to previous years.
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Tags: Ford Motor, Legal & General Assurance Society Ltd., Pension Risk Transfer