£2.4bn Buy-Out Of Nortel Networks UK Pension Plan Completed By Legal & General


    Last Monday, Legal & General, an insurer, has finalised a £2.4bn buyout of the Nortel Networks UK Pension Plan, almost a decade following the collapse of its telecommunications sponsor that forced it into the lifeboat.

    The said deal will have the benefits of approximately 15,500 pensioner members and 7,200 deferred members protected.

    It is the joint second largest ever pensions buyout of the United Kingdom which is matched only by the deal of Pension Insurance Corporation with Philips and was beaten by the £2.5bn pensioner buy-in between L&G and TRW and in 2014.

    The scheme was placed into the Pension Protection Fund (PPF) way back in 2009 after its sponsor went into administration. It has since remained there while the litigation and insolvency proceedings have been ongoing.

    KPMG served as the insurance broker and de-risking adviser to the Trustee. Meanwhile, legal advice was rendered by Travers Smith. Legal & General accepted legal advice from Eversheds Sutherland, while Willis Towers Watson was the scheme actuary.

    The chief exec of L&G Retirement Institutional, Laura Mason, stated: “The collaborative relationship built up with KPMG and the Trustee, working closely together, enabled us to deliver a complex solution to meet the needs of the Trustee and Plan members, whilst delivering to tight timescales.”

    She added: “This transaction continues to demonstrate our solutions driven proposition, while providing wider benefits for the pension environment and the UK economy as we deliver further direct investments.”

    The chair of the board of trustees of the pension scheme, David Davies, said that the agreement means that the scheme will provide its members with the flexibility to decide between various pension options and greater control over their future income.

    He added: “This successful buyout would not have been possible without the collaboration between KPMG, Legal & General and the Plan during the buyout process and also the commitment and diligence of all our advisers during the last 10 years.”