Skip-to-content

Pensions & benefits

Tate & Lyle
£350m pensioner buy-in

How we helped Tate & Lyle cut UK pension liabilities with £350m buy-in

The background

  • £1.1bn of pension liabilities in the main UK plan in late 2012, with approximately two thirds in respect of pensions in payment
  • De-risking out of return-seeking assets was well advanced, with limited exposure to equities after a series of triggered switches
  • The switches were designed to reduce exposure to each of the key financial risks over time
  • Options for longevity risk were considered in parallel to avoid a large and concentrated longevity bet remaining at the end of the hedging programme.

Our solution

  • A working group of representatives from Tate & Lyle and the Trustee Board was set up to consider longevity swaps and pensioner buy-ins
  • The group concluded that a pensioner buy-in would provide better value than a longevity swap given the plan's risk profile and asset strategy
  • LCP helped the Trustees select a suitable buy-in provider and set up a trigger-based execution mechanism
  • This allowed the Trustees to benefit from favourable movements in insurer pricing and execute when their target financial metrics were met.

The results

  • In December 2012 the Trustees insured c40% of the pensioner liabilities in the UK pension plan with Legal & General in a transaction worth £350m.
  • This achieved a concrete step in the de-risking of the pension plan, with the non-insured liabilities after the buy-in reduced to £700m.

How we can help

Buy-ins, buy-outs and longevity swaps

We are market leaders at each stage of de-risking, including planning, investment strategy, transactional services and wind up.

Meet some of our experts
Pensions strategy

We work closely with our clients to understand their pension scheme objectives and implement effective and creative strategies to achieve them.

Meet some of our experts