Press release 27 November 2014

Legal & General secures UK's largest pension scheme buyout

Legal & General has secured a £2.5 billion partial buyout with the TRW Pension Scheme, removing these liabilities from TRW Automotive's balance sheet and insuring over 22,000 of the Scheme's pensioners.

This is the largest pension buyout in the UK to date and follows the £3.0 billion bulk annuity buy-in arrangement with the ICI Pension Fund that Legal & General secured earlier this year, confirming Legal & General's position as the leading insurer in tailored pension de-risking solutions for larger schemes.

Not only is this the largest buyout transaction, but it also incorporates a number of innovative elements that were included as part of an integrated, broader risk management strategy for the Scheme. In particular, a pension increase exchange offer was made to over 15,000 pensioner members as part of the buyout process. These individuals were given the option to receive a higher level of non-increasing pension income in place of inflation linked income, coupled with the security of their pension being insured with Legal & General. Over 5,500 of these individuals accepted the pension increase exchange. TRW also chose to insure the liabilities for a further 16,000 of the Scheme's pensioners with Legal & General and in doing so securing the benefits of nearly all of its UK pensioners.

The Scheme previously implemented a liability driven investment strategy with Legal & General Investment Management in 2007. Legal & General was selected as the insurance partner for the TRW Pension Scheme following a competitive tender process.

Neil Marchuk, Chair of the Trustee Board, said: "This buyout with Legal & General materially de-risks our remaining pension obligations and provides security to members who are insured. Legal & General worked closely with us and our advisers to tailor the arrangement to meet the Scheme's needs and we are very pleased with the insurer's expertise, agility, pragmatism and level of service, all of which contributed to the success of this buyout."

Joseph S Cantie, Executive Vice President and Chief Financial Officer for TRW Automotive, said: "This pension buyout significantly de-risks TRW Automotive's balance sheet position, removing over £2 billion of pension risk in the UK. We worked closely with the Trustee throughout the process and are very supportive of the choice of Legal & General given the quality of their proposition, financial strength and brand."

Kerrigan Procter, Managing Director, Legal & General Retirement, said: "We are excited to have been chosen to work with the TRW Pension Scheme, TRW Automotive and their advisers on this pioneering arrangement. We have worked with the Scheme over many years as they moved from Index Funds to Liability Driven Investment, and now to buyout with Legal & General. It has been a pleasure to build such a great relationship and be in a position to help our client move all the way along their de-risking journey.

2014 has been a landmark year in the pension de-risking market with both the largest buy-in and the largest buyout in the UK - both arranged with Legal & General. These arrangements demonstrate the breadth and depth of tailored pension de-risking solutions that Legal & General offers."

David Ellis, Mercer UK Lead Bulk Pensions Insurance Advisory and lead adviser on the transaction, said: "Mercer is delighted to have been lead adviser to TRW and the Trustee on the largest pension buyout to date in the UK. It is a ground-breaking and innovative arrangement and lights the way for others to follow suit."

For further information, please contact:

Investors:

Laura Doyle, Head of Investor Relations

0203 124 2088

Stephen Thomas, Investor Relations Manager

0203 124 2047

Media:

John Godfrey, Corporate Affairs Directors

0203 124 2090

Richard King, Head of Group Corporate Communications

0203 124 2095

Notes to editors

Legal & General has now written £8.3 billion of total annuity transactions to date in 2014. Our Q3 Interim Management Statement on 4 November 2014 stated, at that time, we had secured £0.8 billion of bulk premium in the fourth quarter. This £0.8 billion very largely represented the initial tranches of the TRW transaction.

A pension buyout is an insurance arrangement where a pension scheme secures annuity policies on behalf of its members. Annuitants cease to be members of the pension scheme and their entitlement is replaced with an annuity policy, with monthly payments made by the insurer. The pension scheme is typically wound up and the pension scheme risk and liability is removed from the sponsoring company's balance sheet.

A pension buy-in is an insurance arrangement where a pension scheme insures all payments due from the scheme to a subset of the scheme's members. Scheme members typically see no change in the administration of their pension. A buy-in removes risk from the pension scheme as it is an asset that perfectly matches a portion of the scheme's liabilities. Pension risk for the sponsoring company is reduced, but the pension liability remains on the company's balance sheet.

Background on TRW Automotive

TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 24 countries and employs approximately 65,000 people worldwide. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services.

Background on the TRW Pension Scheme

The TRW pension Scheme is a UK trust-based pension arrangement providing pension benefits to over 46,000 beneficiaries with assets of £3.5bn (31 March 2014). The Trustee of the Scheme is TRW Pensions Trust Limited.

The Principal Employer is TRW LucasVarity Limited, which is a wholly-owned subsidiary of TRW Automotive Holdings Corp.

The Scheme was established by a Trust Deed dated 30 June 1928 and is primarily the legacy of the former Lucas Industries Plc UK pension schemes. It closed to all future accrual in 2009.

Background on Legal & General

Legal & General is one of the UK's leading financial services companies and one of the UK's top 50 companies in the FTSE 100 Index. Legal & General has been an active participant in the insurance solution pension de-risking market for nearly 30 years and was voted Risk Reduction Provider of the Year at the 2014 and 2013 UK Pensions Awards and Risk Management Provider of the Year at the Pensions Age Awards 2014. Legal & General was also voted Insurer of the Year at the 2014 Insurance Risk Awards.

Legal & General provides annuities to over 750,000 current pensioners and over 170,000 deferred pensioners and has completed a number of landmark transactions. These include the £3.0 billion bulk annuity arrangement with the ICI Pension Fund, the largest bulk annuity policy arranged by a pension scheme in the UK to date, secured in March 2014 and the £3.2 billion longevity insurance transaction with the BAE Systems 2000 Pension Plan in February 2013. Legal & General manages £39.9 billion of annuity assets as at 30 September 2014.

Legal & General offers a range of de-risking solutions, which includes buyout, buy-in, longevity insurance and liability-driven investment (LDI), to pension schemes of all sizes. Legal & General is also able to tailor a combination of LDI and longevity insurance to provide "DIY buy-in" solutions. Legal & General has expertise in investment management, all aspects of defined benefit provision as well as an in-depth understanding of mortality trends and longevity risk. The excellent services we are able to provide also include payroll, administration and communications services.

Background on Mercer

Mercer is a global leader in talent, health, retirement, and investments. Mercer helps clients around the world advance the health, wealth, and performance of their most vital asset - their people. Mercer's more than 20,000 employees are based in 42 countries and the firm operates in more than 130 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global team of professional services companies offering clients advice and solutions in the areas of risk, strategy, and human capital. With over 55,000 employees worldwide and annual revenue exceeding $12 billion, Marsh & McLennan Companies is also the parent company of Marsh, a global leader in insurance broking and risk management; Guy Carpenter, a global leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a global leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @MercerInsights. In the UK, Mercer Limited is authorized and regulated by the Financial Conduct Authority.

The information contained in this release is intended solely for journalists and should not be used by consumers to make financial decisions.

Legal & General Assurance Society Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Legal & General Assurance Society Limited. Registered address: One Coleman Street, London EC2R 5AA. Registered in England No 166055.