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Buyout

An insurance policy issued to each pension scheme member individually which enables the scheme to wind up

What is a buyout?

A buyout is a financial arrangement where an insurance company, like ours, takes over the responsibility of insuring benefits and directly paying members of a pension scheme.

This ensures that members’ benefits are secure and paid as promised, relieving the original employer from managing the complexities of the pension fund, and allowing trustees to wind-up the scheme.

Buyout at a glance

Removes the risks of investment, longevity, interest rate changes and inflation for the members covered by the policy.

Typically covers all members of the scheme, both deferred and current pensioners. We issue the member with an annuity policy and pay the member directly.

Additional cover can be bought to cover additional risks, for example missing beneficiaries and/or data errors, providing more certainty for trustees and sponsoring employers.

How a buy-out works

All buyouts initially begin as buy-ins. Once a scheme has secured all its member benefits, the scheme will typically transition to buyout over a period of time. 

The pension plan’s trustees pay a premium to us for a buyout policy.

We promise to pay the pension benefits to the members as described in the policy, as well as providing cover for dependants.

Scheme and advisers complete data cleanse. During this phase, the buyout operates as a buy-in, ensuring a smooth transition and accurate reflection of member benefits..

We pay all pension benefits directly to members, including any additional benefits for dependants, ensuring their financial security.

Once members have their policies, we take on responsibility for administration and pay members their insured benefits directly..

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Recent transactions

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£34 million buy-in with Walkers Shortbread's Retirement Benefits Scheme

We completed a £34 million buy-in with Walkers Shortbread's Retirement Benefits Scheme, securing benefits for 161 retirees and 238 deferred members
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£1.1 billion buy-in with Deutsche Bank's UK Pension Scheme

We completed a £1.1 billion buy-in with Deutsche Bank's UK Pension Scheme, securing benefits for around 4,000 members and bringing total insured liabilities to £2.1 billion.
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Legal & General completes £1.1 billion buy-in with the SCA UK Pension Plan

Legal & General completes £1.1 billion buy-in with the SCA UK Pension Plan
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Legal & General completes £21 million buy-in with The Leprosy Mission Central Pension Scheme

Legal & General completes £21 million buy-in with The Leprosy Mission Central Pension Scheme
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Legal & General completes third and final buyout with the Nortel Networks UK Pension Plan

Legal & General completes third and final buyout with the Nortel Networks UK Pension Plan
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Legal & General announces a c.£900 million buy-in with the ICI Pension Fund.

Legal & General Assurance Society Limited (“Legal & General”) today announces that it has completed a c.£900 million buy-in with the ICI Pension Fund (“the Fund”), securing the benefits of over 7,000 retirees.
John Graham press release

Legal & General announced a £16 million buy-in with the John Graham (Dromore) Limited Pension and Life Assurance Scheme

Legal & General £16 million buy-in with John Graham (Dromore) Limited Pension and Life Assurance Scheme
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Legal & General agrees £4.8 billion full buy-in for the Boots Pension Scheme

Secures the benefits of all 53,000 retirees and deferred members of the Scheme, making it the UK’s largest single transaction of its kind by premium size and, for L&G, the largest single transaction by number of members.
Looking up at tall office buildings

Legal & General completes £500m buy-in with Deutsche Bank Pension Scheme

Legal & General Assurance Society Limited (“Legal & General”) has completed a c.£500 million buy-in with the DB (UK) Pension Scheme (“the Scheme”), securing the benefits of around 2,000 retirees and deferred members.
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Legal & General agrees c.£340m buy-in with the Cable and Wireless Superannuation Fund

Legal & General Assurance Society Limited (“Legal & General”) today announces it has agreed a c.£340 million buy-in with the Cable and Wireless Superannuation Fund (“the Fund”), securing the benefits of around 1,800 retirees and deferred members.

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