Financial services firm Lehman Brothers has agreed a £675 million buy-in transaction for its pension scheme with insurance firm Rothesay Life, following its application for bankruptcy in 2008.
The buy-in has also secured full employee benefits for all members as a result of the settlement between the pension scheme trustees and the joint administrators of Lehman Brothers International (Europe), which was announced in August 2014.
Aon Hewitt provided scheme actuary and investment advice, as well as advising the trustees on the transaction.
Paul Belok, partner and risk settlement specialist at Aon Hewitt, said: “This transaction has been very complex given the detailed negotiations that have taken place regarding the shortfall in assets, and we are delighted at the outcome that members will now receive their benefits in full rather than at the reduced level that has applied since 2008.
“We advised on the investment strategy to be followed, including the switching to bonds and ultimately to gilt assets to ensure that the assets closely tracked the bulk annuity price in the run-up to the transaction.
“We helped the trustees understand the bulk annuity market, and ensured that the trustees were able to draw out differences between the insurers which participated in the market review.
“It is very pleasing to see this case reach a positive conclusion, especially given the many difficult issues that needed to be dealt with along the way.”