Unilever has insured £129m of its pension fund for employees working abroad through a buy-in with Legal & General.
The deal will significantly lower investment risk and funding volatility within Unilever’s Uniac Pension fund. The scheme was set up in accordance with Section 615 of the Income and Corporation Taxes Act 1998 to provide benefits to employees seconded outside of the UK.
The standalone transaction is the largest buy-in to date for a Section 615 pension plan, but will have no effect from a member perspective or have any implications for other Unilever pension funds, including the £7bn Unilever UK Pension Fund.
LCP was the lead adviser on the buy-in and legal advice was provided by Linklaters.
Uniac Pension Fund trustee chairman Lyn Williams said: “We believe this is a good deal given the particular circumstances of the Uniac Pension Fund. The Uniac Pension Fund is a mature pension scheme and this transaction is a central part of our strategy to simplify the scheme and align a significant portion of our assets and liabilities. Working closely with Unilever, LCP and Linklaters, we are delighted to have concluded this transaction on favourable terms.”
LCP partner Clive Wellsteed said: “Section 615 pension plans operate under different governing legislation to most defined benefit (DB) schemes and have some additional features, including the ability for new dependants to fully commute their pension for cash. This innovative buy-in provides comprehensive coverage of these features and offers excellent value for money to Unilever and the trustees.”
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