Honda

Anders Nilsson - Sthlm / Shutterstock.com

The Honda Group has completed an £800 million pensions buy-in for its UK scheme.

The buy-in covers the whole scheme, which has assets of approximately £800 million and 4,700 members. It has secured the retirement benefits of more than 1,700 retirees and over 3,000 deferred members.

The transaction, which was carried out with Legal and General, used a funding structure to enable the trustee to accelerate the process of de-risking the scheme.

The scheme trustees, sponsor Honda Motor Europe and their advisors set up and worked under a joint working group for the transaction. Aon supported in understanding insurance implications for members’ experience and security, and provided administration, governance and covenant support. Burges Salmon’s pensions and lifetime savings team provided legal advice.

Ray Runza, chair of trustees of the Honda Group UK pension scheme, said: “The security of our members’ benefits has been our highest priority, so this transaction marks an outstanding outcome for all involved. Aon has provided the trustee with invaluable governance, administration and covenant support for a number of years and its support has been crucial in achieving this for our members. Through the buy-in process, Aon helped us understand the impact on the service we will receive and the impact on the security of our members’ pensions.

“I’d like to thank our advisors for their collaborative work to get the scheme to this point. Burges Salmon’s guidance and expertise were instrumental in ensuring that every aspect of the transaction was meticulously planned and executed.”

Mandy Davies, senior consultant at Aon, added: “The collaboration achieved between the scheme’s trustees and advisers, Honda, and Aon’s governance and administration teams has ensured a smooth and well-governed process, underpinned by robust data and strategic alignment. We used our assessment framework focused on capital, covenant and control, to understand the strengths and weaknesses of the scheme’s security before insurance.”

Andrew Kail, chief executive officer, institutional retirement at Legal and General, said: “This is another example of L&G’s ability to deliver for trustees, sponsors and members in all market environments.”