Over £800m secured for smaller pension schemes using L&G Flow
Since the start of 2022, we have cumulatively insured more than £800m of pension liabilities using L&G Flow, our tailored solution for smaller pension schemes, securing the benefits of thousands of pension scheme members across the UK.
The growth in the Pension Risk Transfer (PRT) market over the past few years has been broad based, but recent LCP1 data suggests that smaller scheme transactions below £100m made up almost 80% of all transactions in 2024, with a 60% growth in ‘micro’ scheme transactions under £10m. This demonstrates the vitality of the PRT market for smaller schemes but also raises an operational challenge, as pension scheme administrators and insurers’ post-transaction teams alike are faced with a growing workload.
Of the pension schemes that have completed a buy-in under L&G Flow, nearly 20% have completed a full buyout already, while other schemes have made positive progress on Guaranteed Minimum Pension (GMP) equalisation, data cleansing and payroll handover to L&G.
L&G Flow provides tailored, end-to-end support for smaller pension schemes, with dedicated resources to work with schemes’ existing administration processes. Following enhancements in 2024, L&G Flow enables efficient data cleansing, payroll matching and project management, to ensure trustees have a smooth journey from buy-in to buyout in their chosen timescales. L&G intends to increase the number of transactions completed under Flow in a controlled and sustainable way.
Over 80% of L&G’s Flow transactions so far have been with clients of its Asset Management business, who additionally benefit from the ability to novate their unit funds as premium payment, increasing price certainty and removing asset restructuring costs.
Working with 15 different consultancies in the past year, L&G Flow transactions included buy-ins with the pension schemes of Walkers Shortbread, The Leprosy Mission International, and John Graham Construction, and a recently announced £112m full buy-in with the Fullers, Smith and Turner scheme, L&G’s largest Flow transaction of 2024.
References
1LCP's predictions for the PRT market in 2025.