Investment - Articles - Largest single scheme transaction for Boots Pension Scheme


Aon is lead adviser to the Trustee of the Boots Pension Scheme on £4.8 billion buy-in with L&G and Cardano acted as the lead broker to the transaction and lead strategic advisor to Walgreens Boots Alliance Aon has acted as lead adviser to the Boots Trustee (Boots Pension Limited) for the Boots Pension Scheme on its purchase of a £4.8 billion full scheme buy-in with Legal & General (L&G).

 Alan Baker, on behalf of Law Debenture, as chair of Trustee, Boots Pension Scheme, said: “This agreement with Legal & General gives added protection to our members’ long-term benefits by removing market uncertainty and other financial exposures. We welcome the additional payment from Boots, in addition to the sum it has already committed. As a result, the Scheme will not be reliant on Boots to pay benefits to members and pensions will be protected for decades to come.

 “I would like to take this opportunity to thank my fellow Trustee directors and our predecessors, the Scheme officers and advisers for their hard work over many years to reach this positive outcome for our members.”

 Sebastian James, senior vice-president and managing director, Boots: “We are pleased to have secured the pensions of members of the Boots Pension Scheme with a leading insurer resulting in an excellent outcome for members and Boots.”

 John Baines, partner in the Risk Settlement team at Aon in the UK, said: “This transaction is further evidence of the innovation that can be achieved at scale and pace in an incredibly busy, yet buoyant, insurance market.

 “A key element in achieving this transaction, was dealing with the significant portfolio of illiquid investments held by the scheme. Working in close partnership with the sponsor and trustees, we applied our experience, innovative solutions and lessons learned from other deals of similar size, ensured this wasn’t a barrier to securing benefits. This, combined with taking action on investments early and having the right investment toolkit, ensured risk was managed effectively, costs were reduced and the transaction completed.”

 Andrew Kail, CEO, Legal & General Retirement Institutional, said: “We are very pleased to have agreed this buy-in today with the Boots Pension Scheme, representing the largest ever buy-in for both L&G and the market. This is testament to our long-standing relationship with the client, and I am proud that we have been able to work seamlessly across our insurance, reinsurance and investment management capabilities to deliver an excellent outcome.”
  

 Adolfo Aponte, Managing Director Risk Solutions, Cardano Advisory said: “One of the largest pension schemes in the country, the Boots Pension Scheme has a long history of innovation. Today we build on that legacy by leading on a landmark transaction that safeguards the benefits of tens of thousands of members and achieves strategic objectives long sought by all stakeholders.

 “We would like to thank Walgreens Boots Alliance and the Trustee. This multi-faceted transaction breaks new ground on a number of fronts, including illiquid asset exits, deferred funding structures and speed of execution. In doing so it has expanded the tools available to corporates and pension schemes that are adapting to a new economic reality of higher interest rates and inflation, as well as the prospect of regulatory change.”
 
 Darren Redmayne, CEO, Cardano Advisory commented: “I’m incredibly proud of the quality and dedication of the team at Cardano. The Boots Pension Scheme has been involved with a number of ground-breaking transactions over the years and this £4.8bn insurance deal delivers an excellent outcome for both Walgreens Boots Alliance and the members of the Scheme. This was only possible thanks to the Walgreens Boots Alliance’s commitment to working with the Trustees to deliver a long-term solution for its Scheme members and Cardano’s combination of strategic, risk settlement, covenant, and investment expertise.”

 Sebastian James, Senior Vice President and Managing Director, Boots said: “We are very pleased to have achieved the gold standard outcome for our pension scheme and to have fully secured the benefits of all members with a highly respected insurer. This will provide greater certainty to both the Scheme members and to Boots, and is an excellent outcome for both parties.”

 Alan Baker, on behalf of Law Debenture, as Chair of Trustee, Boots Pension Scheme said: “This agreement with Legal & General gives added protection to our members’ long-term benefits by removing market uncertainty and other financial exposures. We welcome the additional payment from Boots, in addition to the sum it has already committed. As a result, the Scheme will not be reliant on Boots to pay benefits to members and pensions will be protected for decades to come.

 “I would like to take this opportunity to thank my fellow Trustee directors and our predecessors, the Scheme officers and advisers for their hard work over many years to reach this positive outcome for our members.”
   

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