Legal & General announces global PRT bulk annuity transaction, covering Evonik’s US and UK pension schemes
$93 million lift-out completed for the US Evonik Corporation Retirement Plan in September 2020 followed by £544m full buy-in of Evonik’s UK pension schemes in December 2020
Legal & General Assurance Society Limited (“Legal & General”) today announces that it has agreed a £544 million full buy-in of four pension schemes sponsored by Evonik UK Holdings Ltd, securing the benefits of over 3,600 UK defined benefit pension scheme members and facilitating the merger of the four schemes as part of the de-risking process.
This transaction allows Evonik Industries AG (“Evonik”) to continue its global pensions de-risking journey, having agreed a $93 million lift-out of the US plan in September 2020 with Legal & General Retirement America (LGRA), covering over 1,700 retirees. Both the US and UK transactions demonstrate the continued appetite for Pension Risk Transfer (PRT), and marks Legal & General’s second global PRT transaction.
Legal & General Group has a long-standing relationship with Evonik, having provided investment management services through Legal & General Investment Management (LGIM) across the company’s US and UK pension schemes.
Evonik Industries focusses on specialty chemicals and has more than 33 major production sites in the United States, Canada and Mexico, as well as numerous offices, labs, warehouses and distribution centers in North America, employing about 4,800 people in the region. Evonik Industries is active in more than 100 countries all over the world.
The US transaction with Legal & General Retirement America, covering a portion of Evonik’s US plan, was the first PRT transaction between Evonik and a member of Legal & General Group. In the UK, both the Trustee and the company worked in partnership with Legal & General on a sole insurer basis. Effective collaboration among all parties, combined with Legal & General’s solutions driven approach, allowed the Trustee to achieve its aims of merging its four UK schemes and completing the transaction ahead of the year end.
George Palms, President, Legal & General Retirement America
“We are in a unique position at Legal & General to be able to work across the US and UK markets with global companies to ensure their financial commitments to their employees are met. As our second cross-country transaction in less than a year, we look forward to continuing to provide best-in-class service to Evonik and others across borders, as we continue to meet the demand for PRT transactions.”
Stefan Hentschel, Global Head of Pensions, Evonik
“The Company is pleased with the US and UK transactions which provide certainty for the members’ pensions with a strong provider and reduce the financial risk to the sponsor. We were able to leverage the relationship and work effectively with Legal & General to complete both transactions and de-risk the schemes in 2020.”
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About Legal & General
Established in 1836, Legal & General is one of the UK’s leading financial services groups and a major global investor, with international businesses in the US, Europe, Middle East and Asia. With over £1.1 trillion in total assets under management, we are the UK’s largest investment manager for corporate pension schemes and
a UK market leader in pension risk transfer, life insurance, workplace pensions and retirement income.
About Legal & General Retirement America
Legal & General Retirement America (LGRA) specializes in customized pension risk solutions for institutional clients in the US market. Established in 2015, Legal & General Retirement America is a business unit of Legal & General America, Urbana, MD. Legal & General America life insurance and retirement products are underwritten and issued by Banner Life Insurance Company, Urbana, MD and William Penn Life Insurance Company of New York, Valley Stream, NY. Banner products are distributed in 49 states, the District of Columbia and Puerto Rico. William Penn products are distributed exclusively in New York; Banner does not solicit business there. The Legal & General America companies are part of the worldwide Legal & General Group. 21-001
About Legal & General Retirement Institutional
Legal & General Retirement Institutional (LGRI) works with trustees and sponsoring companies of defined benefit (DB) pension schemes of all sizes to settle their pension obligations and secure scheme members’ benefits, through a full range of de-risking solutions. We work closely across divisions in the Legal & General Group, which has to date invested £26 billion in real assets including urban regeneration, clean and low-cost energy, housing and transport links.
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