Insurer Legal & General has today finalised a £2.4bn buyout of the Nortel Networks UK Pension Plan, nearly a decade after its telecommunications sponsor collapsed, forcing it into the lifeboat.
The deal will see the benefits of 15,500 pensioner members and 7,200 deferred members protected.
It is the UK's joint second largest ever pensions buyout, matched only by Pension Insurance Corporation's deal with Philips and beaten by the £2.5bn pensioner buy-in between TRW and L&G in 2014.
The scheme was placed into the Pension Protection Fund (PPF) back in 2009 after its sponsor went into administration, where it has remained whilst litigation and insolvency proceedings have been ongoing.
KPMG acted as the insurance broker and de-risking adviser to the Trustee, while legal advice was provided by Travers Smith. Legal & General received legal advice from Eversheds Sutherland, while Willis Towers Watson acted as the scheme actuary.
Laura Mason, chief exec of L&G Retirement Institutional, said:
The collaborative relationship built up with KPMG and the Trustee, working closely together, enabled us to deliver a complex solution to meet the needs of the Trustee and Plan members, whilst delivering to tight timescales.
This transaction continues to demonstrate our solutions driven proposition, while providing wider benefits for the pension environment and the UK economy as we deliver further direct investments.
David Davies, chair of the pension scheme's board of trustees, said the agreement means the scheme will provide its members with flexibility to decide between different pension options and greater control over their future income.
"This successful buyout would not have been possible without the collaboration between KPMG, Legal & General and the Plan during the buyout process and also the commitment and diligence of all our advisers during the last 10 years," he added.