KPMG has today announced that its Pensions and Investment Advisory teams have acted as the lead investment advisor to TRW Automotive, throughout the £2.5 billion partial buy-out of the TRW Pension Scheme in the UK’s liabilities with Legal & General.
TRW Automotive is a major global supplier of automotive systems, modules and components to automotive industry.
Jon Exley, investment advisory partner at KPMG said, “The deal is the culmination of a long and successful journey. This is a great example of an engaged sponsoring company and trustee assisted by their advisers and in-house pensions team, working together to achieve a goal that benefits both parties through a combination of investment, funding and liability management.
“Although the investment strategy was implemented in a sophisticated way, it was ultimately a straightforward and cost efficient combination of risk controlled equities, various flavours of credit and liability driven investment (LDI) combined with the smooth transition over the final stages facilitated by this strategy that did the trick on the investment side.
“We are dlighted with the result. TRW Automotive has permanently abated a significant proportion of its UK pension liabilities and the TRW Pension Scheme in the UK will benefit from a reduction of risk and greater scheme security going forward.”
A recent KPMG report predicted that the UK pensions insurance buyout market is set to grow significantly in the next five years, reaching £20bn per annum by 2020.
Simon Chan, PR Assistant Manager, KPMG
KPMG Press office: +44 (0) 207 694 8773
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Notes to Editor:
KPMG’s UK Pensions practice consists of around 400 pensions professionals who are actuaries, accountants, CFA or Pension Management Institute qualified. The team’s client base covers schemes with total aggregate liabilities of over £200 billion.
KPMG’s Investment Advisory team is made up of around 70 investment professionals, advising both sponsors and trustees.
KPMGs specialist Pensions Insurance team combines pensions, investment, life insurance and wind-up professionals. The team has helped clients in more than 150 completed insurance transactions of a range of sizes from £1 million to more than £2 billion with a combined total of more than £15 billion of liabilities.
KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 11,500 partners and staff. The UK firm recorded a turnover of £1.8 billion in the year ended September 2013. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. It operates in 155 countries and has 155,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.
With 2013 sales of $17.4 billion, TRW Automotive ranks among the world's leading automotive suppliers. Headquartered in Livonia, Michigan, USA, the Company, through its subsidiaries, operates in 24 countries and employs approximately 65,000 people worldwide. TRW Automotive products include integrated vehicle control and driver assist systems, braking systems, steering systems, suspension systems, occupant safety systems (seat belts and airbags), electronics, engine components, fastening systems and aftermarket replacement parts and services. All references to "TRW Automotive" or "TRW" in this press release refer to TRW Automotive Holdings Corp. and its subsidiaries, unless otherwise indicated.
TRW Automotive news is available on the internet at www.trw.com
This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.