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3i completes £95m buy-in

1 May 2019

The trustees of private equity and infrastructure investor 3i’s pension scheme have de-risked 20% of their liabilities in a £95m deal.

Financial services giant Legal & General has taken responsibility for those pensions, which are being paid to members.

3i trustee chair Carol Woodley described this buy-in as a positive step towards securing the long-term financial security of the scheme’s members.

The deal brings the amount of 3i’s pensions in payment now insured to around 60%. The trustees completed a buy-in with Pension Insurance Corporation in 2017.

The deal with Legal & General is the latest step in the trustees’ de-risking journey. Aside from insuring the liabilities, the plan has involved the trustees favouring bonds in its portfolio.

Woodley said that further deals could be agenda. “The attractive pricing offered by Legal & General meant that an additional buy-in could be accommodated within the plan’s long-term de-risking programme,” she added.

This is expected to be a record year for de-risking bulk annuity deals. The market exceeded £24bn in 2018, well ahead of the annual average of £10bn to £13bn. The market could hit £30bn this year, consultant Willis Towers Watson predicted in December.

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