Tui UK has completed a £370 million buy-in for the cash balance section of its group pension trust.
Through a pension risk transfer transaction with Legal and General, all section benefits are now fully secured. The trustee worked with the provider to monitor pricing for 18 months to ensure it was in a position to react to favourable market conditions at the right time.
In addition, £30 million of the premium has been deferred to allow the scheme to run-off some illiquid assets. This is payable over the next two years.
The scheme has also completed a £184 million full buy-in for its term allocated pensions section in order to deliver on the long-term strategic goals developed by the trustee and Tui.
LCP was the lead transaction adviser to the trustee and provided actuarial and investment advice, while Linklaters provided legal advice. Isio and Herbert Smith Freehills advised the sponsor and Macfarlanes provided legal advice to Legal and General.
Nick Dunk, group pensions manager at Tui, said: “Following a collaborative process working with the trustee, we are pleased to have completed a further transaction in respect of the trust as part of our de-risking journey. We have now worked to fully insure the liabilities of two sections of the trust, which provides further security for both members and Tui.”
Mike Roberts, Pan trustees partner and chair of the trustee, added: “Securing the benefits for our members has been the aim of the trustee for many years, and we are delighted to have achieved another successful transaction. This is a prime example of how collaboration between all parties can get the best outcome for members of the scheme.”
Adrian Somerfield, director, institutional retirement at Legal and General, said: “We are pleased that the trustee has chosen to secure all section benefits with us. Working collaboratively with the trustee, sponsor and their advisors, we helped implement an efficient solution for the scheme’s illiquid investments and now look forward to supporting the members over the long term.”
