L&G & Paternoster on pension acquisition trail

by Gill Montia

Story link: L&G & Paternoster on pension acquisition trail

Paternoster, the insurance company that specialises in acquiring final salary/defined benefit company pension schemes, has taken over the £150 million pension scheme of Lasmo, the UK oil exploration company.

Under the terms of the agreement, all members’ pension benefits are guaranteed by Paternoster and scheme participants have been assured their pensions will be paid in full.

The move follows Paternoster’s acquisition last month of the £178 million pension scheme of publishing firm, Emap.

Companies are increasingly eager to offload their expensive final salary pension schemes because it allows costly pension liabilities to be removed from their balance sheets.

Analysts are expecting up to ten further such acquisitions before the end of the year, with Paternoster and Legal & General (L&G) expected to acquire the bulk of the business.

It is understood that AIG, L&G and Prudential were also interested in the Lasmo scheme and experts are predicting that the total value of pension assets transferred between now and Christmas could total around £2 billion.

The success of the Emap and Lasmo transactions should go some way to assure pension trustees that their members’ interests will not be compromised by a takeover of their scheme.