The trustee of the Turner and Newall (T&N) pension scheme has entered into a £1.1 billion bulk annuity contract with Legal and General.
The scheme has been in the Pension Protection Fund’s (PPF) assessment period since 2006. However, because the scheme’s financial strength exceeds the threshold below which the PPF would automatically step in, the trustee must by law prepare to wind up the scheme outside the PPF.
Current and future pension scheme members will see no immediate change in the way their pension payments are made, and will receive timely updates on any changes to the administration of the scheme.
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Mercer advised the trustee on the transaction, and Allen and Overy provided legal advice.
Tim Culverhouse, managing director at Alexander Forbes Trustee Services, said: “The trustee, Legal and General, and their advisers have worked hard to make this transaction achievable, given the legal requirement to prepare to wind up the scheme outside the PPF.
“As a result, I hope it will be possible to apply a small one-off uplift to members’ annual pensions in due course. The scheme’s financial position is such that it remains unable to pay members’ full original pensions.
“I regret that there is no real prospect that the scheme could ever have sufficient assets in the future to provide members with a larger pension than Legal and General will provide.”
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