Buy-in
An insurance policy issued in the name of the trustees of the pension scheme and held as an asset of the scheme
What is a buy-in?
A buy-in is an insurance policy that helps cover a portion of a pension scheme’s liabilities.
It ensures there are enough funds to meet future obligations and is held as an asset of the scheme, alongside other investments.
Schemes often use buy-ins as part of their risk management or long-term self-sufficiency strategies.
Buy-in at a glance
Removes the risks of investment, longevity, interest rate changes and inflation for the members covered by the policy.
Can cover all members or a subset of the liabilities allowing ‘partial de-risking’. For example, deferred pensioners, current pensioners or subsets of either.
Held as an asset of the scheme and we make monthly payments to the scheme in relation to benefits of covered members, while the trustees retain responsibility for administration.
How a buy-in works
Trustees pay a premium to us for the buy-in policy.
The premium can be paid using cash or an in-specie transfer of scheme assets.
Scheme and advisers complete data cleanse.
We pay the benefits specified in the policy in respect of the covered members to the trustee, including any death benefits for dependants.
Trustees and the sponsoring employer remain ultimately responsible for meeting members’ benefits, but the policy removes risks in respect of insured members,
Options available
We offer a tailored approach to every pension scheme
Recent transactions
L&G Flow surpasses £1bn milestone
£4.6 billion buy-in with Ford pension schemes
L&G completes c.£1.6 billion buy-in with the BP Pension Fund
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