Two schemes for the water company, the United Utilities Pension Scheme and the United Utilities plc Group of the Electricity Supply Pension Scheme, have completed a buy-in for £1.8bn.  

  

The deal with Legal & General Assurance Society covers about two-thirds of the pension funds’ liabilities.  

   

The insurer said it provided a bespoke price lock to the assets held by the schemes, including a portion that was already held with its subsidiary Legal & General Investment Management.   

  

Gary Dixon, who chairs the trustee boards, said: “We’re delighted to have completed this buy-in transaction across our two pension schemes, providing security for all our members and taking a further step on our derisking journey. The trustees and company worked collaboratively throughout the process with excellent support from our advisers Aon, Mercer and Sackers.”  

  

Aon advised the trustees on the transactions and led the broking process, while Sackers gave legal advice and Mercer was the strategic investment adviser. Scheme sponsor United Utilities was advised by consultancy LCP and law firm Slaughter and May. Clifford Chance were the legal advisers for L&G.  

  

Partner in Aon’s risk settlement group John Baines said the trustees achieved their “highly bespoke” transaction objectives through meticulous planning, a clear strategy and collaborative approach.  

  

“By insuring the majority of liabilities for both schemes, we helped develop and implement a number of innovative mechanisms to future-proof the transaction that will result in increased security for all members,” Baines added.  

   

Andrew Kail, chief executive of Legal & General Retirement Institutional, thanked those involved in the deal and said: “We’re on track for one of our busiest years ever, having now written £6.7bn of pension risk transfer business in the UK year-to-date.”  

 

The bulk annuity market has been active this year as high gilt yields have boosted the funding levels of defined benefit schemes, leading many to accelerate their derisking journeys. Earlier this month, Standard Life announced a £1bn buy-in with two schemes of US business services provider API Group Corporation, the Chubb Pension Plan and the Chubb Security Pension Fund, while the trustees of the BP Pension Fund admitted they were considering a buy-in following press reports.
   

 

A recent ruling about contracted-out schemes requiring s37 actuarial confirmations could put a spanner in the works however, as insurers might now want to undertake extra due diligence around this.