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Allen & Overy advises on largest UK pension scheme insurance policy

 

Allen & Overy advised the trustee of the ICI Pension Fund (the main pension scheme of Imperial Chemical Industries, now part of AkzoNobel) on the largest ever bulk annuity insurance policy (or buy-in) arranged by a UK pension scheme.

Two policies cover GBP3.6 billion of pensioner liabilities and were provided by Legal & General (GBP3 billion) and Prudential (GBP600 million).

The fund provides pensions to around 50,000 pensioner members. The insurance policy is an asset of the fund delivering payments to cover a significant proportion of the liability to those pensioners. The transaction therefore reduces risk within the fund by ensuring an income stream without the investment, longevity or inflation risk inherent with investing in non-matching asset classes.

Philip Jarvis, insurance partner at Allen & Overy commented: “This landmark deal helps protect one of the largest UK pension funds and highlights the sector’s continued appetite to reduce risk and improve security for members.”

Neil Bowden, pensions partner commented: “The Fund Trustee ran a very robust process to ensure the contracts were fit for purpose and delivered in the timeframe they required. We have been delighted to help them complete this project.”

Partner Philip Jarvis led on the deal, assisted by counsel Andrew Barton and senior associate Kate McInerney. Partner Neil Bowden and senior associate Andy Cork advised on pensions aspects. Derivatives advice was provided by senior associates Andrew Lauder and Tom Roberts. Associate Revathi Srinivasan provided banking advice and Karishma Brahmbhatt advised on data protection issues.

For further information, please contact Margherita Orlandini, margherita.orlandini@allenovery.com, on +44 (0)20 3088 4196.

 

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