The SCA UK Pension Plan has completed a £1.1bn buy-in with Legal & General (L&G) Assurance Society, securing the benefits of 5,900 retirees and 3,600 deferred members.

L&G had a preexisting, long-standing relationship with the scheme, which has been a client of L&G’s asset management division for 31 years.

LCP acted as lead transaction adviser and advised the scheme’s trustees in all aspects of the deal.

Slaughter and May provided legal advice to the scheme and Muse Advisory acted as pensions manager.

WTW and Clifford Chance advised the scheme sponsor on the transaction, while CMS Cameron McKenna Nabarro Olswang LLP provided L&G with legal advice.

The scheme sponsor, Essity Holding UK Limited, is part of the Essity Group, which is a global hygiene and health company based in Sweden.

Essity employs around 1,600 people in the UK across six manufacturing sites and three commercial offices.

L&G said the transaction demonstrated progress on its new growth strategy, supporting its ambitions to write around £50bn of UK pension risk transfer deals over the next five years.

The scheme agreed a price lock and premium payment portfolio with L&G that aligned with the scheme’s assets.

This included its asset management pooled fund holdings, which were novated to L&G, with the insurer saying this created "cost certainty during the transition process”.

Commenting on the announcement, SCA UK Pension Plan chair and independent trustee director, Carol Woodley, said: “I’m delighted that the trustees, Essity, L&G and our advisers have been able to work together to complete this transaction.

“It is 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.”

L&G Institutional Retirement CEO, Andrew Kail, stated that the insurer was “very pleased” to have agreed the buy-in with the scheme, which would allow L&G to deepen its existing relationship with the client and “create greater security” for its members.

“We are continuing to see an acceleration in demand across the sector with c£1.4trn of DB pension scheme assets sitting on UK company balance sheets,” he continued.

“Our long-standing relationships with clients, including through our asset management division, allows us to support pension schemes through their de-risking journey, working in collaboration with clients such as the SCA UK Pension Plan to maximise outcomes for plan members and trustees.”

LCP partner and lead transaction adviser, Clive Wellsteed, added: “One of the most important decisions in today's market is how to approach and engage with insurers to best deliver the transaction objectives.

“The bespoke process followed here did exactly that and delivered highly competitive pricing and full tailoring to the trustee’s and sponsor’s timeline and desired terms.”

This article was originally published on our sister website, Pensions Age.

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