The Law Society Pension Scheme has completed the purchase of a £320 million bulk annuity policy from MetLife Assurance Limited, covering some 1,800 members. The Law Society represents solicitors across England and Wales.
The final transaction, completed in June 2011 for £240 million, insures all known scheme members. The pensioners in payment were insured with MetLife in a separate £80 million transaction in late 2009, meaning that the combined total liability of the scheme of £320 million is now fully insured.
Both transactions were arranged by Mercer, acting as investment adviser and insurance broker to the trustees. MetLife was selected for this second and final phase following a competitive tendering process begun in December 2010. Key criteria used to assess bidding insurers were long-term financial security and affordability of their quotations to the scheme and the Society.
As part of the transaction, the trustees have the option to insure further risks with MetLife in due course, such as the risk that the member data is incorrect. It is intended to split up and allocate the policy to scheme beneficiaries in 2012, as part of a wind-up of the scheme.
Harry Harper, Principal at Mercer, commented “The transaction provides security to members and Mercer is delighted to have helped yet another pension scheme to resolve its pension obligations.”
John Hayes, Chairman of the Trustees, commented “This bulk annuity deal was made possible by a partnership between the trustees and the Law Society, with proactive and specialist support and advice from the trustees’ advisers. At this time of change in the way solicitors are regulated I believe it is good that those who have worked for the Society can see their benefits have been secured in this way and the scheme's deficit removed”.
The Law Society has reported the transaction to all of its members.
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