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Boots has announced that Legal and General Group has agreed a £4.8bn full buy-in with the Boots Pension Scheme.
According to the deal, liabilities for its pension scheme will be switched to the insurance firm. The buy-in secures the benefits of all 53,000 retirees and deferred members of the scheme, making it the UK’s largest single transaction of its kind.
Legal and General has a long-standing relationship with Boots, having provided investment management services to the scheme for over 20 years.
Boots stated that it had explored a range of options for the scheme and the transaction with Legal and General “was the best way to safeguard members’ benefits against market uncertainty, improved life expectancies, and other risks”.
Cardano was the strategic advisor to Walgreens Boots Alliance and lead broker for the transaction, while Baker McKenzie provided legal advice.
Meanwhile, Aon was strategic adviser, lead investment adviser and broker for the transaction representing the trustee, while Sackers provided legal advice.
Additionally, Slaughter and May and Simmons and Simmons provided legal advice to Legal and General.
Alan Baker on behalf of Law Debenture, as chair of Trustee, Boots Pension Scheme,said: “This agreement with Legal and 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, added: “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.”
