Pearson strikes £500m pension insurance deal with L&G

Pearson (Xetra: 858266 - news) , the FTSE-100 education group, will announce on Friday a renewed drive to restructure its pension liabilities when it unveils a £500m buy-in deal with Legal & General (LSE: LGEN.L - news) (L&G).

Sky News‎ has learnt that Pearson will unveil the deal encompassing a significant proportion of its retirement scheme alongside its annual results.

It will be the latest so-called Pension Risk Transfer (PRT) ‎transaction struck by a leading blue-chip British company.

Pearson itself has agreed similar pension buy-ins in the past, announcing deals to insure £1.2bn of ‎its liabilities with Aviva (Other OTC: AIVAF - news) and L&G in the autumn of 2017.

‎The PRT sector has ballooned in size as pension trustees and corporate boards have attempted to manage pension risks more effectively.

Dozens of companies in the FTSE-100, such as British Airways and Rolls-Royce Holdings, have turned to such deals ‎in recent years.

A source close to Pearson said the agreement with L&G to be announced on Friday would mean that roughly half the liabilities in the Pearson Pension Plan had now been insured.

The publication of its annual results will come in the middle of a turnaround of the former owner of the Financial Times led by John Fallon, its chief executive.

Pearson said in January that it expected to deliver adjusted operating profit of between £540m and £545m for last year.

This week, it announced the sale of a US textbook business to Nexus Capital Management, a private equity firm, for $250m.

Pearson and L&G declined to comment.