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Allen & Overy advises on the largest pensioner buy-in ever completed

 

09 May 2019

Allen & Overy have advised the Trustees of the British Airways Pension Scheme on a ground-breaking £4.4bn pensioner bulk annuity buy-in.

This is the largest pensioner buy-in ever completed, covering around 22,000 BA pensioners and around 60% of pensioner liabilities, and is a significant step in reducing risk in the Scheme.

The deal follows on from transactions that the Airways Pension Scheme entered into via its wholly owned subsidiary (a ‘captive insurer’) with Canada Life and PartnerRe in 2017, covering around £1.7bn of liabilities.

In a market first, the deal allows those previous buy-in arrangements to be taken over by Legal & General. Taking into account previous derisking, the Airways Pension Scheme is now 90% hedged against all longevity risk – the risk attached to the increasing life expectancy of its pensioners.

Kate McInerney, Partner, commented: “We are very proud to have supported the Trustee in this ground-breaking deal which is testament to its commitment to reducing risk and adding security for members.”

The Allen & Overy Pension Risk Group has a long track record of cutting edge, innovative work for trustee clients, particularly in the de-risking arena. We advised on the first big deals in 2007-8; we continue to lead the derisking market a decade later. We pride ourselves on our track record of market firsts and big deals – but the same technical complexity exists in all deals, whatever the size.

“Allen & Overy LLP ‘expertly combines technical expertise and commercial acumen’ to provide ‘an excellent service that is pragmatic, responsive and client-oriented’.”
Legal 500 UK 2018 (Pensions)

“They will always go that one step further to help their clients; this is the service we have received to date. Nothing is too much trouble. They are totally client-focused and we couldn’t ask more from them.”
Chambers UK 2018 (Pensions)

Pensions Law Firm of the Year – FT PIPA Awards 2017

European Pensions Law Firm of the year - European Pensions Awards 2017 and 2018

 

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