Legal & General is engaged in offering life insurance, pensions and investment management services. Credit: Ceri Breeze via Shutterstock.

Legal & General Assurance Society announced that it has completed a buyout with Nortel Networks UK Pension Plan.

This deal between Legal & General and Nortel insures the final tranche of plan members’ benefits. It consisted of a £14m initial premium, and a £6m top-up on buyout. As a result, Legal & General has now insured £2.5bn of the plan’s liabilities.

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The plan’s sponsor went into administration in 2009 and entered a Pension Protection Fund (PPF) assessment. While in assessment the plan was able to secure material additional funds from the Nortel insolvency process to improve member benefits.

Dominic Moret, head of origination and execution, UK PRT, Legal & General Retirement Institutional, said: “This transaction marks a significant milestone in the Plan’s journey since 2009 and is testament to the work carried out by the trustee board and their advisers to secure funds from the insolvency process. The collaboration, flexibility and foresight shown by all parties enabled the Plan to complete a ground-breaking initial transaction in 2018 with the ability to secure additional benefits through follow up transactions. We are proud to be providing financial security and certainty to Plan members.

“These transactions serve as excellent examples of the positive role that insurers are playing in securing, protecting and delivering pensions in the UK.”

Clive Gilchrist, Chair of Trustees, added: “I am delighted that after fifteen years of hard work by the trustee board and advisers we have completed the final buy out, having successfully recovered significant funds to provide members with benefits well above PPF levels. I would like to thank everyone concerned for their efforts.”

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Earlier in the year, Legal & General has announced the completion of a £900m ($1,146m) buy-in with the ICI Pension Fund to secure the benefits of over 7,000 retirees.

This marks the 12th transaction since the fund entered into an umbrella agreement with Legal & General in 2014. So far, Legal & General has completed transactions totalling £7bn in aggregate with the fund and covers around 70% of the pension fund’s total liabilities.

In addition, LCP and Allen & Overy have advised the Trustee of the Fund on all twelve of the Fund’s buy-ins with Legal & General, Macfarlanes provided legal advice to Legal & General.