UK insurer Legal & General Assurance Society Limited (L&G) has completed a c.£800 million buy-in with the Honda Group, UK Pension Scheme (the Scheme). This secures the retirement benefits of over 1,700 retirees and over 3,000 deferred members.

The Scheme is a longstanding client of L&G’s Asset Management business, and hence, the insurer was able to leverage its past expertise to create a suitable package of solutions for the Scheme.

L&G provided a price lock direct to the Scheme’s assets during the transaction, ensuring price certainty while the terms were finalised.

Meanwhile, the Scheme paid the premium through a combination of an in-specie asset transfer and cash, with L&G also providing a partial, flexible deferred premium solution to support the run-off of the Scheme’s illiquid asset holdings over the coming years.

The sponsoring employer of the Scheme, Honda Motor Europe Limited, is the centre of Honda’s operations for Europe and part of a globally recognised automotive manufacturer and retailer.

Since the Scheme’s trustees focus strongly on member experience, the strength of L&G’s in-house administrative and customer care offering was integral to the proposition. This included the provision of member option factors to the Scheme during the buy-in period to support continued use of the Scheme’s online benefit modeller.

This transaction further supports L&G’s strategic goal of writing £50-65 billion of UK PRT business over the five years ending in 2028.

Andrew Kail, Chief Executive Officer, Institutional Retirement, L&G, commented, “This is another example of L&G’s ability to deliver for trustees, sponsors and members in all market environments. We are delighted to have helped the Scheme secure its members’ retirement benefits. What really differentiates our proposition is our ability to offer schemes a multi-award-winning customer service offering as well as bespoke transaction structuring that caters to individual schemes’ practical needs.”

Ray Runza, Trustee Chair, added, “The security of our members’ benefits has been our highest priority, so this transaction marks an outstanding outcome for all involved. The Trustee Board is delighted to see a successful outcome after a rigorous selection process across market insurers and months of dedicated preparation, and effort by all advisors. I’d like to thank our advisors for their collaborative work to get the Scheme to this point and look forward to working with L&G for their continued support to our members.”

EY advised the Scheme Trustees and Honda. Meanwhile, Mercer, as an investment advisor, provided further support to the Trustees. Hymans Robertson acted as section 36 advisors and XPS as the Scheme actuary, while Honda was further advised by Isio as investment advisors.

Swapnil Katkar, UK Financial Services Partner, EY, said, “We are delighted to have supported both Honda Group and the Scheme Trustees in collaboration with other advisors on this buy-in. This transaction demonstrated that executing a buy-in within a strict timeframe remains possible while still achieving attractive pricing and suitable contractual terms through a concerted effort. In addition to the standard due diligence, this transaction involved substantial and extensive review of insurers’ administrative and customer service capabilities, and we are confident that the completed deal will benefit both the savers and the UK markets.”

Burges Salmon acted as legal advisor to the Trustee, Sackers provided legal advice to Honda, and CMS was L&G’s legal advisor.

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