Legal & General in pension transfer deal with Philips US unit

LONDON (ShareCast) - (ShareCast News) - Legal & General America (L&G (LSE: LGEN.L - news) ) is to provide retirement payments under a group annuity contract to 14,000 Royal Philips US retirees and other former employees in its first American pension risk transfer deal, the company said on Friday. Legal & General America (L&G) is to provide retirement payments under a group annuity contract to 14,000 Royal Philips US retirees and other former employees in its first American pension risk transfer deal, the company said on Friday.

L&G said Philips (Amsterdam: PHIA.AS - news) will transfer $900m (£600m) of pension obligations. Benefits payouts will be split equally between L&G and The Prudential Insurance Company of America.

In a separate arrangement American United Life Insurance, a unit of OneAmerica, will be issuing annuities to plan participants who had not yet retired by May 2015, bringing the total transaction between the three insurance companies to $1.1bn (£730m) and covering a total of 17,000 plan participants.

L&G chief executive Nigel Wilson said the US was a key market.

"We have a successful US life assurance business, are rapidly growing our investment management business, and have now entered the US pension risk transfer market. We are a leader in these markets in the UK, and plan to be a major participant in them in the US," he said.