Legal & General has officially confirmed a full buy-in agreement worth £4.8 billion with the Boots Pension Scheme. This transaction stands as the largest of its kind in the UK, both in terms of premium size and the number of members involved.
The comprehensive buy-in secures the retirement benefits of all 53,000 members, encompassing both retirees and deferred members within the Boots Pension Scheme. For Legal & General, this marks the most significant single transaction in its history, measured by the sheer number of participants.
Boots, a prominent health and beauty business in the UK with a vast network of over 2,000 stores, serves as the sponsoring company for the scheme. Legal & General highlighted its enduring relationship with Boots, spanning over two decades of providing investment management services to the scheme.
“This buy-in begins the conclusion of a de-risking process that the scheme first embarked on in 2001” stated Legal & General.
The company said the innovative nature of the transaction, describing it as “another step forward in DB pension de-risking.” The approach combines an investment and insurance solution for the scheme’s asset holdings, ensuring a transaction’s certainty while maximising value through the transfer of assets or associated sale proceeds to Legal & General.
Cardano played a pivotal role as the strategic advisor to Walgreens Boots Alliance and the lead broker for the transaction. Legal advice was provided by Baker McKenzie, while Aon took on the roles of strategic adviser, lead investment adviser, and broker, representing the Trustee. Legal advice for the Trustee was offered by Sackers, with Slaughter and May and Simmons & Simmons providing legal counsel to Legal & General in this landmark deal.
Commenting on the deal, Andrew Kail, CEO, Legal & General Retirement Institutional, said: “We are very pleased to have agreed this buy-in today with the Boots Pension Scheme, representing our largest ever single transaction. This is a testament to our long-standing relationship with the client, and I am proud that we have been able to work seamlessly across our insurance, reinsurance and investment management capabilities to deliver an excellent outcome.”
Alan Baker on behalf of Law Debenture, as Chair of Trustee, Boots Pension Scheme, noted, “This agreement with Legal & General gives added protection to our members’ long-term benefits by removing market uncertainty and other financial exposures.
“We welcome the additional payment from Boots, in addition to the sum it has already committed. As a result, the Scheme will not be reliant on Boots to pay benefits to members and pensions will be protected for decades to come. I would like to take this opportunity to thank my fellow Trustee directors and our predecessors, the Scheme officers and advisers for their hard work over many years to reach this positive outcome for our members.”
Sebastian James, Senior Vice President and Managing Director, Boots, added, “We are very pleased to have achieved the gold standard outcome for our pension scheme and to have fully secured the benefits of all members with a highly respected insurer. This will provide greater certainty to both the scheme members and to Boots, and is an excellent outcome for both parties.”
