John Townsend Trust, a former charity that provided education and care to deaf children and young people, has agreed to a £30 million full scheme buy-in transaction for its pension and assurance scheme.
Legal and General Assurance Society, which is part of financial services organisation Legal and General, will be covering the benefits of more than 280 pension scheme members for the trust, which saw its scheme enter into a Pension Protection Fund (PPF) assessment in December 2015 following its insolvency.
According to Legal and General, this type of transaction enables the trustees to secure benefits for the scheme’s members at or above the level of compensation that would have been provided by the fund. The organisation also provided a pension risk transfer solution for members by enabling the pension scheme to eventually exit the fund.
Independent trustee business Open Trustees was advised on the transaction by pension management services Barnett Waddingham and legal advice was provided by law firm Gowling.
Jonathan Hazlett, managing director at Open Trustees, commented that he is “delighted” to have entered into this PPF+ buy-in policy with Legal and General, as the insurance market is “extremely busy” currently and it can be “very challenging” to secure member benefits for smaller schemes.
“It has been a long process getting to this point as we negotiated all of the difficulties associated with the charity's insolvency and, in particular, realising our interest in the school buildings. While the PPF provides a valuable safety net and a significant level of protection, many members will now receive higher benefits than they might otherwise have expected had the scheme entered the PPF,” Hazlett said.
