Allen & Overy has advised the trustee of the ICI Pension Fund (the main pension scheme of Imperial Chemical Industries, now part of AkzoNobel) on the largest-ever bulk annuity insurance policy (or buy-in) arranged by a UK pension scheme.
Two policies cover £3.6bn of pensioner liabilities and were provided by Legal & General (£3bn) and Prudential (£600m).
The fund provides pensions to around 50,000 pensioner members. The insurance policy is an asset of the fund delivering payments to cover a significant proportion of the liability to those pensioners.
The transaction therefore reduces risk within the fund by ensuring an income stream without the investment, longevity or inflation risk inherent with investing in non-matching asset classes.
Partner Philip Jarvis led on the deal, assisted by counsel Andrew Barton and senior associate Kate McInerney. Partner Neil Bowden and senior associate Andy Cork advised on pensions aspects.
Derivatives advice was provided by senior associates Andrew Lauder and Tom Roberts. Associate Revathi Srinivasan provided banking advice and Karishma Brahmbhatt advised on data protection issues.