LCP completes 70th streamlined buy-in as opportunities persist for smaller transactions despite record-breaking activity

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LCP analysis shows a record 203 buy-ins and buy-outs in 2022 – a 30% jump on 2021 - and predicts this trend will continue in 2023. Despite the record activity levels, LCP is continuing to complete smaller transactions at competitive pricing and terms through LCP’s streamlined buy-in and buy-out service.   

LCP’s latest streamlined transaction is an £11m full scheme buy-in with Just Group for The American Optical UK Pension Scheme (‘the AOUK Scheme’) in May 2023.  This is LCP’s 70th transaction using LCP’s streamlined buy-in and buy-out service, bringing the total liabilities secured through this service to over £2.7bn. 

With the increase in demand, insurers have been automating and streamlining their processes for smaller transactions. They are increasingly requiring sub-£100m transactions to use a streamlined transaction process. Using LCP’s service saves insurers (and schemes) significant time and costs, in particular on legal work, as the contracts have been pre-negotiated with each insurer.

This AOUK Scheme transaction shows that even the smallest of schemes can receive strong insurer engagement through LCP’s streamlined service. It was able to transact within three months of deciding to go to market and at competitive pricing and terms.  

Key to the AOUK Scheme’s success was the preparatory work carried out by the sole Trustee – the Trustee appointed LCP as transaction adviser in 2021 and worked closely with the sponsor, Carl Zeiss Vision UK Ltd, to get the AOUK Scheme’s data and benefit documentation ‘transaction ready’.  When the funding level improved, the Trustee was able to go to market quickly via LCP’s streamlined service and secure the members’ liabilities in full.  

Mark Fletcher, Trustee of the American Optical UK Pension Scheme and Client Director at Vidett, commented: “I am very pleased to conclude this buy-in with Just Group for the AOUK Scheme and its members.  Through detailed preparation and working in partnership with the sponsor, we were able to move nimbly and take advantage of the favourable market conditions.”

Catherine Hopper, Partner at LCP who led the transaction, commented: “I am delighted to have worked with the AOUK Scheme. This shows that even £11m schemes can secure attractive terms in an extremely busy marketplace. We are pleased to have been able to deliver such a favourable outcome and are looking forward to supporting many other smaller schemes – we are working on double the number of streamlined transactions than we were this time last year.”    

Kishan Radia, DB Business Development Manager at Just Group, added: “There is a vibrant consolidation market for schemes of all sizes, and we are proud to have been entrusted to secure the benefits for the members of the AOUK Scheme. We used our innovative bulk quotation service alongside LCP’s streamlined service to deliver a highly efficient transaction. This was a great team effort with high levels of collaboration shown by all parties involved in delivering the transaction.” 

Matthew Guilliatt, UK&I Finance and Legal Director at Carl Zeiss Vision UK, commented: “I am thrilled that we have collectively completed the buy-in, in such a smooth and efficient manner.  The streamlined approach from LCP, along with the close collaboration with the Trustee and wider stakeholders, has enabled a seamless process to be concluded swiftly and a great outcome for the Scheme.” 

You can read more about LCP’s streamlined services and why smaller schemes are using them here.

Further commentary on the buy-in and buy-out market can be found in LCP’s pensions de-risking update published last month.