Clifford Chance

Clifford Chance advises Legal & General on record £2.5 billion buyout with the TRW Pension Scheme

Leading international law firm Clifford Chance has advised Legal & General’s Retirement, (LGR) business on a £2.5 billion partial buyout with automotive supplier TRW Pension Scheme, (“the Scheme”). The transaction, the UK’s largest pension buyout, will remove these liabilities from TRW Automotive’s balance sheet and insure over 22,000 of the Scheme’s pensioners.

This is the largest pension buyout in the UK to date and also incorporates a number of innovative elements, including an offer to over 15,000 pensioners to exchange future inflation-linked increases for a higher level of non- increasing pension income. The buyout elements were novel and complex and had to cover a range of outcomes as the terms were agreed before the offers were made to pensioners.

Clifford Chance supported Legal & General throughout the process, from the very initial stages of the transaction through to execution and follows Clifford Chance's role on Legal & General's £3 billion bulk annuity buy-in arrangement with the ICI Pension Fund earlier this year – the largest buy-in in the UK market to date.

Clare Hoxey, partner in Clifford Chance's pensions practice commented; "2014 has been a landmark year in the pension de-risking market and Clifford Chance is delighted to have been able to support Legal & General on both the largest buy-in and the largest buyout in the UK market."

Clifford Chance's team was led by Pensions Partner Clare Hoxey with support from Corporate Insurance Partner Katherine Coates and Senior Associates Matthew Preston (Pensions) and Hugo Laing (Corporate Insurance).