Ford Motor Company has completed buy-ins totalling £4.6 billion for two of its pension schemes.
The schemes are the Ford hourly paid contributory pension fund and the Ford salaried contributory pension fund. The buy-ins were completed as one combined transaction, securing the benefits of more than 35,000 retirees across the funds.
The transaction was between Legal and General, the funds’ trustees and their advisor, and was finalised in a short timeframe.
Ahead of coming to market, the trustees of the funds prepared investment strategies with Aon and the Ford in-house investment management team to align with insurer investment portfolios. Legal and General provided a price lock linked to the funds’ assets to ensure price certainty, while the contractual terms were finalised. The trustees paid the premiums through in-specie asset transfers to minimise transaction costs.
The trustees were advised by Aon as lead transaction adviser and Mayer Brown as lead legal advisor. Hogan Lovells also provided legal advice and Aptian provided administration support to the trustees. Slaughter and May provided legal advice to Legal and General.
Jonathan Wood, chair of the trustees, said: “Having worked towards this for many years, we are delighted to have achieved this significant further de-risking milestone, providing even greater security for our members. The outcome achieved is testament to the commitment and dedication shown over many years by the Trustees and Ford to support the Funds, as well as the skill and expertise of our advisers. We are delighted to extend our long-standing partnership with L and G through the buy-in for the Funds and look forward to working together to continue to support our members.”
António Simões, chief executive officer at Legal and General, added: “This transaction puts us firmly on track to achieve our growth targets. Our long-term relationship with Ford is a great example of the competitive edge that comes from the synergies between Legal and General’s businesses, and the ongoing value this creates for trustees, sponsors and pension scheme members.”
