Slaughter and May advised Legal and General Assurance Society Limited (Legal & General) on the further de-risking of The Pearson Pension Plan, a UK pension plan sponsored by Pearson plc, by the way of a circa £500 million buy-in transaction. This transaction is in addition to a buy-in transaction between the parties in 2017, which Slaughter and May also advised Legal & General on.
The Plan’s strong funding position has allowed the Trustee to follow a strategy of reducing risk by aligning investments more closely with the pension benefits payable to members. This buy-in transfers further longevity risk to Legal & General, reducing the pension risks being underwritten by Pearson and provides additional security for members of the plan.
The buy-in agreement in 2017 was established as an “umbrella contract” 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 insurance contract pricing.