LCP has advised on a c£370 million buy-in between Legal & General Assurance Society Limited (“Legal & General”) and London Heathrow’s BAA Pension Scheme (“the Scheme”), securing the benefits of more than 1,400 retirees.

The Sponsoring company, Heathrow Airport Limited, runs London Heathrow Airport, one of the world’s busiest airports and a vital global transport hub.

Today’s buy-in represents the Scheme’s second Pension Risk Transfer (“PRT) transaction with Legal & General, following a £325 million buy-in in 2018 covering 1,300 retirees. Legal & General has now secured the benefits of nearly 3,000 members of the Scheme, demonstrating its commitment to a long-term relationship with the Trustee.

An umbrella contract has been established as part of the transaction, enabling the Trustee to potentially insure further liabilities quickly and easily as it continues its de-risking plans.

The Scheme is an existing client of Legal & General, having established a partnership with Legal &General’s Investment Management business (“LGIM”) to manage the Scheme’s assets in 2020.
The Trustee was advised on the transaction by LCP and legal advice was provided to the Trustee by CMS. MacFarlanes provided legal advice to Legal & General.

Ken Hardman, Partner, LCP, said:
“We are delighted to have advised the trustees on the purchase of the Scheme’s second buy-in
transaction. The favourable outcome was achieved through collaborative working between advisers, trustees, corporate sponsor and L&G, allowing us to optimise the drivers of pricing and execute efficiently.”

Adrian Somerfield, Director, Legal & General Retirement Institutional, added:
“Having built trust and a strong relationship with the Trustee over a number of years, we are delighted to have secured the retirement benefits for another 1,400 members. Our umbrella contract ensures we are able to move forward with the Trustee in a swift and effective
manner as they continue their de-risking plans.”

Phil Wilbraham, Chair of Trustee, commented:
“London Heathrow’s BAA Pension Scheme today announces that it has agreed a c£370 million buy-in with Legal & General Assurance Society Limited. The Trustee is delighted that this deal continues to derisk the overall pension scheme and the deal is testament to great teamwork between L&G and the Trustees excellent advisory team.”