Pearson To Announce £500m Pension Insurance Deal With L&G

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On Friday, an FTSE-100 education group, Pearson, is scheduled to announce a renewed drive to restructure its pension liabilities when it reveals a £500 million buy-in deal with Legal & General.

Alongside its yearly results, Pearson is set to reveal the deal encompassing a significant proportion of its retirement scheme.

It will be the most recent so-called Pension Risk Transfer (PRT) ‎transaction that is struck by a leading blue-chip British firm.

In the past, Pearson itself has agreed to similar pension buy-ins, announcing deals to insure £1.2 billion of ‎its liabilities with Aviva and L&G in the autumn of 2017.

‎The PRT sector has increased in size as corporate boards and pension trustees have launched efforts to manage pension risks more effectively.

Dozens of firms in the FTSE-100, such as Rolls-Royce Holdings and British Airways, have turned to such deals ‎in the past years.

A source who is close to Pearson said that the agreement with L&G that is set to be announced this Friday would mean that approximately half of the liabilities in the Pearson Pension Plan had now been insured.

The publication of its yearly results will come amidst a turnaround of the former owner of the Financial Times that was led by its chief executive, John Fallon.

Last January, Pearson said that it is expecting to deliver adjusted operating profit of between £540 million and £545 million for the previous year.

This week, it announced the sale of a textbook business that is based in the United States of America to Nexus Capital Management, a private equity company, for $250 million.

Pearson and L&G both turned down requests for comment regarding the matter.