Legal & General completes third and final buyout with the Nortel Networks UK Pension Plan

29 May 2024

  • Legal & General has now insured £2.5 billion of the Plan’s liabilities.
  • This builds on Legal & General’s long-standing relationship with the Plan. The Plan completed its first transaction with Legal & General in 2018 to secure benefits in excess of PPF levels for members.

Legal & General Assurance Society Limited (“Legal & General”) today announces that it has completed a buyout with the Nortel Networks UK Pension Plan (“the Plan”). This third transaction insures the final tranche of Plan members’ benefits. It consisted of a £14 million initial premium and was followed by a £6 million top-up on buyout. Legal & General has now insured £2.5 billion of the Plan’s liabilities.

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. The Plan agreed its first transaction with Legal & General in 2018 when it completed a £2.4 billion buyout to secure the benefits in excess of PPF levels for members. The initial transaction included provision to secure additional benefits for members on receipt of further recoveries from the Nortel insolvency process, and was followed by a £105 million buyout with Legal & General in 2021.

The Trustee was advised on the transaction by Isio, with WTW acting as scheme actuary and legal advice was provided by Travers Smith and Pinsent Masons. PWC and Hogan Lovells provided advice regarding financial recoveries for the Plan. Legal advice was provided to Legal & General by Clifford Chance.

Dominic Moret, Head of Origination and Execution, UK PRT, Legal & General Retirement Institutional: “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 advisors 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: “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.”

Source: Legal & General
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