Insured Self-Sufficiency ®

paternoster

A joint insurance and investment solution that allows pension schemes that cannot yet afford buyout to accelerate their de-risking plans.

ISS covers the same types of risk as a bulk annuity, but it uses a modified approach, and provides a different level of protection. These factors mean the typical price difference of ISS compared to a bulk annuity could be 10-15%.

What does it do?

As an introduction to Insured Self-Sufficiency, please watch our animated video, which explains the solution and its benefits.

Insured Self-Sufficiency - how it works video

Insured Self-Sufficiency (ISS) at a glance

ISS brings together the expertise of both Legal & General’s investment management and insurance businesses. It provides DB pension schemes with:

  • A cashflow-matched investment strategy and an insurance-based risk framework on their own pension scheme's balance sheet
  • The security of a 1 in 200 year capital reserve to protect against a deterioration in funding levels, for example due to investment underperformance or people living longer than expected. This might typically be equivalent to a capital buffer of 12-14% above the best estimate of what we expect the pension promises will cost to provide.
  • An enhancement, rather than replacement, of the sponsor’s covenant and protection against the risk of subsequent sponsor insolvency
  • Reduced governance and pension scheme running costs
  • A clear path and straightforward conversion to buyout at a later date (that doesn’t have to be with Legal & General)

ISS typically covers all members of the pension scheme – both deferred and current pensioners.

How does ISS work?

  • Legal & General Investment Management (LGIM), our Group’s Investment Manager, manages the pension scheme’s assets. The assets are managed in accordance with a clearly defined set of investment objectives and constraints to give comfort and certainty to all stakeholders. 
  • If investments don’t deliver as expected or people live longer, then the capital reserve established at the outset of the ISS structure protects the pension scheme’s funding level
  • In return for our capital provision, we expect to receive a series of pre-agreed premiums over the lifetime of the solution. But importantly those premiums are contingent on positive outcomes: should experience be less favourable than expected then we don’t get paid. Instead that money is retained within the pension scheme

Please see our Q&A video for further information.

Insured Self-Sufficiency (word mark) is a registered trade mark in the UK in the name of Legal & General Group plc.

Frequently asked questions