Four firms land roles on year’s biggest UK pension risk transfer

A host of firms have advised on the biggest UK pension risk transfer deal announced so far this year, as UBS’s UK pension plan completed a £1.7 billion buy-in with Legal & General.

Sackers advised the trustee, supported by Gowling, while Hogan Lovells Cadwalader acted for UBS and Slaughter and May advised Legal & General.

The deal secures the benefits of more than 7,000 members and builds on an existing relationship between the plan and L&G, following a £900 million buy-in for the Credit Suisse section of the scheme two years ago.

Big-ticket pensions work

Pension risk transfer deals see insurers take on the liabilities of defined benefit pension schemes, and have created a steady stream of high-value mandates for law firms in recent years.

Slaughter and May advised L&G on all legal aspects of the UBS deal, including the transfer of an existing longevity hedge with Zurich and associated reinsurance arrangements with Canada Life Reinsurance.

Its team included corporate partner Thomas Peacock, finance partner Caroline Phillips and pensions partner Chris Sharpe. Sackers’ team was led by partner Ralph McClelland.

The transaction comes amid a run of multi-billion-pound deals as pension schemes seek to transfer investment and longevity risks to insurers, which are competing for the assets backing those pensions.

Legal & General agreed a £4.6 billion buy-in with Ford’s pension schemes last year, while Pension Insurance Corporation (PIC) completed a £4.3 billion transaction with Rolls-Royce’s pension fund. Both deals rank among the largest ever completed in the market.

Private capital firms have also moved further into the market. Apollo-backed Athora acquired PIC for £5.7 billion last year, while Brookfield bought life insurer Just Group, giving it a major foothold in UK pension risk transfer.