Standard Life has concluded a £335m bulk purchase annuity (BPA) transaction with the London Stock Exchange Group (LSEG) pension scheme.

The BPA arrangement, which completed in May, covers 1,740 members from both sections of the LSEG pension scheme, the LSE section and the LCH section.

Senior business development manager at Standard Life, Rhian Littlewood, said: “This transaction was made possible thanks to the exceptional collaboration and engagement between all parties involved, working together to identify the solutions that best matched the specific de-risking requirements of the scheme.

“Increased funding levels meant that the scheme was well positioned to explore how to reduce its risks through a bulk purchase annuity deal. Through this collective effort, the scheme was able to seize an ideal market opportunity, resulting in a smooth and efficient process, and we are pleased to have been part of this solution.

“The BPA market is seeing heightened levels of demand due to higher interest rates narrowing the funding gap of many defined benefit schemes. This is reflected in our record H1 2023 BPA activity, having written premiums totalling £3.2bn.”

Aon acted as the lead adviser for the transaction, with Eversheds Sutherland LLP and Redington providing legal and investment advice respectively to the trustees. Standard Life was advised by Herbert Smith Freehills LLP and ITM.

Defined benefit pension director at LSEG, Georgina Wallis, added: “This step is another significant milestone in the group’s long-term pension strategy. We are delighted to have achieved this result for the scheme which was a product of the collective efforts of the trustee, LSEG, their advisers and Standard Life.”

Partner in Aon’s risk settlement group, Charlotte Quarmby, concluded: “This transaction demonstrates that, despite a busy market, bespoke solutions can still be developed to meet client needs.

“By carefully engaging with insurers and having clarity from the trustee on what was needed, we were able to help the scheme achieve an attractive outcome with Standard Life and to meet their objectives. In our role as specialist adviser we helped the two sections achieve a better result by taking them to market together - which allowed the trustee to access better pricing and terms due to the larger size.”

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