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Pension risk transfers

Eversheds Sutherland has unsurpassed breadth and depth of experience in the pension de-risking market. Our team have advised on bulk annuity/ pension risk transfer and longevity deals ranging in size from a few million to multi-billion, and in complexity from market standard to bespoke collateralised structures. We have acted on some of the largest pension risk transfer deals in the UK and US and have experience across the Irish, Dutch and Canadian markets. Our clients in some deals are insurers, including new market entrants. In others, we represent corporate purchasers – guiding them through what may be one of their largest transactions ever.

Our pension de-risking/risk transfer services include:

  • advising schemes/ plans and sponsors on global de-risking projects across multiple jurisdictions
  • drafting and negotiating contract terms, bulk annuity contracts and definitive purchase agreements
  • drafting and review of benefit specifications and forms of group annuity contracts, whether covering retirees in pay status or vested deferreds
  • due diligence for insurers, for ‘all risks’ deals, where the insurer takes on the risk that the benefits are not as described in the benefit specification
  • reinsurance – negotiating reinsurance arrangements including where back-to-back with front-end bulk annuity or longevity transactions
  • longevity swaps (including where structured as derivatives) and other hedging arrangements
  • captive’ or ‘pass-through’ structures where pension schemes seek to access the reinsurance market directly
  • collateralised transactions – security issues involved in insurance and reinsurance transactions
  • the drafting and negotiation of Administrative Services Agreements
  • advice on the factors considered by independent fiduciaries (IF) in determining whether an insurer’s group annuity contract meets the “safest available annuity” standard under 29 C.F.R. § 2509-95-1
  • obtaining the necessary regulatory approvals with respect to the group annuity contract (and related annuity certificates) for a pool of annuitants residing throughout the U.S.
  • analysis of the treatment in insolvency of group annuity contracts, including those supported by assets held in a separate account, and cut-through reinsurance arrangements

Recent transactional work by the firm and members of the team at predecessor firms includes:

  • represented Legal & General/Banner Life as group annuity contract provider in a large pension de-risking transaction with Philips Electronics in the US
  • acting on a collateralised buy-in covering liabilities circa £1bn
  • acting on a EUR 200m transfer of Dutch pension liabilities
  • acting for an Irish pension scheme on a circa EUR 400m pensioner buy-in using a captive insurer
  • represented Legal & General on the £1.1bn pension buy-out with the Vickers Pension Scheme in the UK
  • acting for a large insurer on a £1bn longevity reinsurance contract
  • represented Kimberly-Clark Corporation with respect to a $2.5 billion group annuity contract
  • represented Motorola Solutions, Inc. with respect to a $4.2 billion transaction
  • represented Bristol-Myers Squibb with respect to a in a $1.4 billion group deal
  • represented Verizon with respect to a $7.5 billion group annuity contract

Whether it is entering into the pension risk transfer markets or developing new and innovative products with existing players, there is no global firm that is better placed than Eversheds Sutherland to assist.

Contact our pension risk transfer team

If you would like any further information or need advice on pension risk transfer, please contact our legal team.

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