PENSION provider Legal & General yesterday penned a deal to take over a £1.1bn pension scheme for former staff of defunct asbestos manufacturer Turner & Newall, in the biggest deal of its kind in the UK.
L&G has taken over the running of the T&N pension scheme after the UK’s pension bailout fund, the Pension Protection Fund, concluded that the scheme had enough assets to continue supplying annuities to its 30,000 members.
The T&N scheme has been closed to new members for years and L&G will gradually wind it up while providing all members with an annuity that pays more than they currently receive. L&G is not receiving a fee, but aims to profit from the transaction through managing the T&N assets more efficiently.
The scheme’s trustee, Tim Culverhouse of Alexander Forbes Trustee Services, said he hoped L&G’s management would allow it to “apply a small one-off uplift to members’ annual pensions”.
T&N was sold to US carmaker Federal-Mogul in 1998 but the buyer filed for bankruptcy protection in 2001 after being hit with $11bn (£6.9bn) in asbestos legal claims.
By 2004 the pension scheme had an £875m deficit. The deal just beats the £1.1bn buyout of the Thorn pension fund by Pension Corporation in 2008.