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The SCA UK Pension Plan, for UK employees of Swedish tissue manufacturer Essity, entered into an insurance contract with Legal & General on 1 July.
The contract insures benefits for 5,900 retirees and 3,600 deferred members. Scheme sponsor Essity employs about 1,600 people in the UK across six manufacturing and three commercial offices.
The full buy-in completes a project the scheme started in early 2024 to assess if it could lock in its financial position. In April, it had an £83m surplus.
L&G said it agreed to a price lock and premium payment portfolio which aligned with the scheme’s assets. This included pooled fund holdings, which were novated to L&G.
Trustee chair Carol Woodley said the transaction was “good news for our members and increases the level of security that their pension benefits will be paid in full. The outcome was only possible in the time frame as a result of the great team effort between everyone involved.”
LCP were the lead advisers on the deal, while Slaughter and May provided legal advice and Muse Advisory acted as pensions manager. WTW and Clifford Chance advised the sponsor, and CMS Cameron McKenna Nabarro Olswang were lawyers to L&G.
LCP partner Clive Wellsteed said the bespoke process followed in this transaction “delivered highly competitive pricing and full tailoring to the trustee’s and sponsor’s timeline and desired terms”.
LCP also took over scheme administration in September last year, following the retirement of in-house staff at the plan.
Andrew Kail, chief executive of L&G, Institutional Retirement highlighted the firm’s long-standing relationship with the scheme via its investment management arm, as well as continuing high demand for bulk annuities.
“Our long-standing relationships with clients, including through our asset management division, allows us to support pension schemes through their derisking journey, working in collaboration with clients such as the SCA UK Pension Plan to maximise outcomes for plan members and tustees,” he said.
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