Deutsche Bank has completed a £500 million buy-in for its UK pension scheme, its first to include deferred members.
The transaction with Legal and General will secure the benefits of around 2,000 retirees and deferred members. Due to an existing umbrella contract with Legal and General, the buy-in was able to be completed on the same commercial terms.
Lane Clark and Peacock was the lead transaction adviser and provided strategic longevity de-risking advice to the trustee of the scheme, while transaction legal advice was by law firm CMS. Aon acted as scheme actuary and investment adviser, Slaughter and May was the ongoing legal adviser, and DLA Piper UK provided legal advice to Legal and General.
This takes the scheme’s total buy-ins to £1,500 million, including a £570 million buy-in between Legal and General and Deutsche Bank pension scheme in February 2021.
Jeremy Sowden, head of global pension and benefits at Deutsche Bank, said: “This latest transaction means that approximately half of the total liabilities of the scheme have now been insured, covering not just all pensions in payment but also a significant proportion of pensions that are yet to do so. We will continue to work with the trustee to extend the buy-ins as further opportunities arise.”
Michael Wrobel, chair of the trustee board for the DB (UK) Pension Scheme, added: “We are very pleased to have insured another significant proportion of the scheme’s liabilities with Legal and General, further reducing the risks the scheme is exposed to. The existing relationship with Legal and General, including the umbrella contract in place, resulted in a smooth and efficient process benefiting all parties and ultimately the members of the scheme. The trustee and the bank remain ready to continue to take advantage of future opportunities to further de-risk as they arise.”
Aysha Patel, new business and origination lead at Legal and General Retirement Institutional, said: “This transaction demonstrates that partial buy-ins continue to be an effective de-risking tool for larger schemes on their way to full insurance, allowing them to take advantage of favourable market opportunities when they arise.”