The sponsoring employer, TUI UK (“the Sponsor”), is a leisure, travel, and tourism company.
Following the initial transaction, the Trustee worked collaboratively with Legal & General to monitor pricing for a period of 18 months and ensured they were in a position to react to favourable market conditions and transact at an opportune time. This ensured an efficient transaction while affordability remained attractive. c£30m of the premium has also been deferred to allow the Scheme to run-off some illiquid assets and is payable over the next two years.
Overall, the Scheme has now completed three transactions with Legal & General, having also completed a £184 million full buy-in for the TAPS section of the Scheme. LCP was the lead transaction adviser to the Trustee and also provided actuarial and investment advice. Linklaters provided legal advice to the Trustee. Isio and Herbert Smith Freehills provided advice to the Sponsor, and Macfarlanes provided legal advice to Legal & General.
Adrian Somerfield, Director, Institutional Retirement, Legal & General: “We are pleased that the Trustee has chosen to secure all section benefits with us. Working collaboratively with the Trustee, Sponsor and their advisors, we helped implement an efficient solution for the Scheme’s illiquid investments and now look forward to supporting the members over the long term.”
Mike Roberts, PAN Trustees Partner, Chair of Trustee: “Securing the benefits for our members has been the aim of the Trustee for many years, and we are delighted to have achieved another successful transaction. This is a prime example of how collaboration between all parties can get the best outcome for members of the Scheme.”
Imogen Cothay, Partner, LCP: “This latest transaction represents a significant milestone, with all members’ benefits in the section now insured in full. Having advised the Trustee since 2011, it has been a pleasure to support the Trustee in its collaboration with TUI UK to develop and implement a long-term plan for the Scheme, and to have seen this achieved so successfully.”
Nick Dunk, Group Pensions Manager, TUI: “Following a collaborative process working with the Trustee, we are pleased to have completed a further transaction in respect of the Trust as part of our de-risking journey. We have now worked to fully insure the liabilities of two Sections of the Trust which provides further security for both members and TUI.”
Carol Jones, Consultant, Linklaters: “We are very pleased to have worked closely with the Trustee once again to successfully close a further pension risk transfer transaction with Legal & General which enhances the security of all members’ benefits in the BAL Section of the Trust, and delivers on the long-term strategic goals developed by the Trustee and TUI.”
Karen Gainsford, Partner, Isio: “A transaction of this complexity has required a problem solving mindset alongside robust analysis, as well as having a deep understanding of the key stakeholders. We’re delighted to have supported TUI with our expertise in risk settlement and investment advice on the latest transaction for the Trust.”
Samantha Brown, Managing Partner EPI, Herbert Smith Freehills: "We're delighted to have helped on a transaction which secures such a favourable outcome for the Scheme and TUI."
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