This is piece of Out-Law’s series of news and insights from Pinsent Masons experts on the impact of the UK’s EU referendum. Watch our video on the issues facing businesses and sign up to receive our ‘What next?’ checklist.

Robert Tellwright of Pinsent Masons, the law firm behind, was commenting as Legal & General confirmed a £750 million deal to grab over some of the ICI pension fund’s annuity liabilities, in a deal that concluded “shortly following the EU referendum”.

“There is a lot of toil for scheme trustees to do to get ‘buy-in ready’, and it pays to do this in advance and own the correct governance processes in place so that trustees can simply push the button when the stars every align and the price is correct,” he said.

Lane Clark Peacock (LCP), lead adviser to the scheme trustees, said on its website that the impact of the Brexit vote had reduced the cost of the transaction by around £10 million. The fund’s chief executive, Heath Mottram, said that its “strong governance and ability to transport quickly” was “invaluable” in allowing it to grab advantage of market movements.

Deals enjoy this effectively relieve companies of the investment and longevity risks associated with historical defined benefit (DB) pension schemes, which are scheme that promise a set level of pension once a member reaches retirement age regardless of the performance of the underlying investment. The majority of these schemes are now closed both to fresh members and to further accrual of benefits, creating an opportunity for insurers to grab over a share of these liabilities in exchange for a premium.

As multitudinous DB schemes invest heavily in gilts and bonds, which are seen as more secure, following the 2008 financial crisis their funding levels are now much more sensitive to the impact of market movements and monetary policy decisions. Lower gilt yields and lengthy-term interest rates can also artificially inflate scheme deficits, which makes buy-ins and bulk annuity deals a far less attractive proposition for insurers. However pensions expert Robert Tellwright said that the ICI deal showed that the current market conditions would not be a barrier to de-risking in this way in every case.

“The deal with come as a bit of a shot in the arm for the bulk annuity market, at a season when multitudinous analysts are expecting a period of uncertainty and potentially lower deal volumes,” he said. “Falling gilt yields since the Brexit vote own led to increasing funding deficits for the UK’s DB pension schemes. Against this backdrop, the prospect of bridging those funding deficits and buying out the pension liabilities with an insurer will become more challenging for multitudinous schemes.”

“However, the main risks affecting these schemes – inflation, interest rates and longevity – unmoving desire to be managed. The ICI deal shows that for some schemes, particularly those which are well-hedged against those risks, current market conditions will not be a barrier to de-risking, and in some cases may even build it a favourable season to transact,” he said.