Legal & General Completes Record Pension Buy-In with Boots UK

On a notable Friday, Legal & General Group PLC declared that they had entered into a substantial agreement concerning the pension scheme of the prominent UK health and beauty retailer, Boots UK Ltd. The deal, with a staggering value of GBP4.8 billion, is observed as the largest single pension buy-in within the UK, based on the size of the premium.

A Groundbreaking Transaction

This landmark buy-in not only redefines the pension transaction landscape by its sheer volume but also holds significance as Legal & General's most sizeable single transaction to date when considering the number of members involved. This pension scheme includes securing the future of 53,000 retired and deferred members of the Boots Pension Scheme.

Two Decades of Partnership

Emerging from Nottingham, England, Boots is a subsidiary under the umbrella of Retail Pharmacy International division of the Illinois-based conglomerate, Walgreens Boots Alliance Inc. This deal accentuates a relationship that has matured over two decades, with Legal & General previously managing investments for the Boots Pension Scheme.

The partnership has now reached a new pinnacle as this complete buy-in conveys the final step towards de-risking the pension scheme for Boots employees, ensuring stability and security for the scheme's members.

Legal & General's Expanding Footprint

In the fiscal year running up to this point, Legal & General boasts having facilitated global pension risk transfers valued at an impressive GBP13.4 billion. The company has highlighted a particularly robust market within the UK, spurred by a surge in demand due to improving pension funding ratios.

Legal & General proudly holds a solvency ratio of about 224%, even after factoring in the significant Boots Pension Scheme transaction as of November 17.

The significance of the transaction lies in its unique structure, offering a blend of investment and insurance solutions designed for the asset holdings of the scheme. This allows for secured transactions and maximization of value by integrating its assets under Legal & General's management.

Statements from Legal & General

Legal & General reaffirms its robust solvency position, indicating substantial capacity to continue investing in growth opportunities. Andrew Kail, CEO of Legal & General Retirement Institutional, expressed his satisfaction with the deal, attributing it to the strong, sustained client relationship and the company's capability to offer comprehensive solutions spanning insurance, reinsurance, and investment management.

Kail also highlighted the growing demand in the sector, driven by a trend where more pension schemes are moving closer to buyout phases than ever before.

Despite the grand scale of the transaction, shares in Legal & General saw a slight decrease by 0.3% at 226.90 pence on the London stock exchange during the following morning of the announcement.

Legal, General, Boots