Hogan Lovells Advises Pilkington Pension Scheme Trustee on £1 bn Insurance Agreement

LONDON, 31 December 2011 - Hogan Lovells has advised the Trustee of the Pilkington Superannuation Scheme on a £1 billion insurance agreement with Legal & General.

The insurance, which relates to £1 billion of pension liabilities and 11,500 members of the Scheme, protects the Scheme against longevity risk - the risk that pensioners will live longer than expected.  Through the insurance, the risk of having to contribute more assets to the Scheme should pensioners live longer than expected is transferred to Legal & General.  Legal & General will be required to fund any pensions exceeding the projections made in 2011 based on agreed assumptions about how long each pensioner is expected to live.

The Hogan Lovells team advising the Trustee was led by corporate insurance Senior Consultant Steven McEwan, with specialist pensions advice provided by senior associate Edward Brown. 

Commenting on the transaction, Steven McEwan said:

"We are pleased to have advised on another successful longevity risk transaction. We expect to see many more of these transactions as there are a large number of pension schemes who require protection against longevity risk, and this need is likely to increase over time.  The transactions raise complex pensions, insurance and debt capital markets issues and the strength and effective integration of Hogan Lovells' pensions, insurance and debt capital markets practices means that we are very well placed to achieve success in continuing to work on such transactions."

Legal & General were advised by Allen & Overy.

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