The British Steel Pension Scheme
In May 2023, we completed our fourth buy-in with the British Steel Pension Scheme as a final step to fully insuring the scheme. The transaction secured the remaining 40% of the liabilities bringing the total insured liabilities with L&G to c.£7.5 billion. In doing so, the scheme became the largest pension scheme in the UK to have secured full insurance.
The trustees closed a significant deficit, which is a great outcome for members who have had their benefits fully secured much sooner than originally anticipated. The sponsoring company has removed a large historical liability from its books, enabling it to focus on its core business operations.
To insure benefits at this scale, the scheme entered a strategic partnership with us and LGIM in November 2021. Key solutions resulting from the partnership included:
- establishing an umbrella contract, allowing the scheme to complete each transaction efficiently on pre-agreed contractual terms when pricing was attractive;
- the ability to transfer a significant portfolio of property assets efficiently to L&G as part of premium payment; and
- implementing a strategy to improve the scheme's funding level by aligning their investments and hedging with L&G's pricing, including the transfer of the scheme's in-house investment team to LGIM.
The power of partnerships
