Hymans Robertson advises the Trustee in c.£800m buy-in between L&G and Honda Group UK Pension Scheme

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

The sponsoring employer of the Scheme, Honda Motor Europe Limited (“the Sponsor”), is the European arm of Honda, a globally recognised automotive manufacturer and retailer.

The Scheme is a client of L&G’s Asset Management division. L&G provided a price lock to the Scheme’s assets to provide price certainty while the terms of the transaction were finalised.

The Scheme paid the premium through a combination of an in-specie asset transfer and cash. L&G provided a partial deferred premium solution to allow the Scheme’s illiquid asset holdings to run off over the coming years.

The Scheme Trustees and the Sponsor and their advisors worked under a joint working group (JWG) set up. JWG was advised by EY as a joint advisor while the Trustees were further advised by Mercer as investment advisors, Hymans Robertson as section 36 advisors and XPS as the Scheme actuary while the Sponsor was further 
advised by Isio as investment advisors. Burges Salmon provided legal advice to the Trustee, Sackers provided legal advice to the Sponsor and CMS provided legal advice to L&G.

Andrew Kail, CEO, Institutional Retirement, L&G, commented:

“We are very pleased to have helped the Scheme secure its members’ retirement benefits. The transaction reflects the range of features L&G is able to offer schemes, from a quality customer service offering to bespoke deal features that cater to individual schemes’ practical needs. With large numbers of schemes continuing to approach the insurance market, we’re well-placed to meet the healthy demand and provide a secure home for members’ retirement benefits.”

This buy-in supports L&G’s strategic ambition of writing £50-65 billion of UK PRT business over the five-year period ending in 2028.

Ray Runza, Trustee Chair, said:

“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.”

Swapnil Katkar, UK Financial Services Partner, EY, added:

 “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.”

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