22 February 2019

LCP advises Pearson
Pension Plan on further c£500m pensioner buy-in

The Pearson Pension Plan (“the Plan”), a UK pension plan sponsored by Pearson plc, has purchased an additional pensioner buy-in with Legal & General for approximately £500m. Together with two policies purchased in 2017, (with Legal & General and Aviva), approximately 50% of the Plan’s liabilities (approximately £1.8bn) are now insured.

LCP was the lead advisor to the Trustee of the Plan on the buy-in helping the Trustee to lock into an attractive price opportunity. 

The buy-in agreements in 2017 were established as “umbrella contracts” which allowed for future buy-in transactions to be executed using pre-agreed terms so that the Trustee could move quickly to take advantage of attractive pricing.

Clive Wellsteed, partner at LCP and lead adviser to the Trustee, said:

“The Pearson Plan conducted the largest buy-ins of 2017 at £1.2bn and set up umbrella contract structures to allow quick follow on transactions that benefit from the same attractive terms as the initial buy-ins.  

“The ease of execution under the umbrella contract meant a win-win for the Trustee, who was able to lock in attractive pricing relative to the very latest longevity trends, and L&G who got off to a strong start to 2019.  The Trustee was able to complete the transaction about two weeks after receiving pricing.”