Boots parent company Walgreens Boots Alliance (WBA) has closed on a deal with financial services company Legal & General offloading the UK multiple’s employee pension liabilities to the latter.

In a statement this morning (November 24), Boots revealed that the £4.8bn buy-in policy is the “largest single transaction of its kind,” insuring all 53,000 members who are currently covered by the Boots Pension Scheme.

Boots said that after considering its options it went for the insurance transaction on the basis it was “the best way to safeguard members’ benefits against market uncertainty, improved life expectancies and other risks and deliver Boots’ strategic objectives for the scheme”.

The multiple will bring forward roughly £170m in payments it had already committed to, and will pay additional contributions to the scheme expected to be in the region of £500m.

It added: “The previous guarantee from a WBA entity to the scheme has been terminated and replaced with a smaller temporary guarantee, which will decrease in line with the settlement of these commitments.”

Scheme members will “in due course” receive individual annuity policies issued by Legal & General who will then assume responsibility for paying benefits, “directly enabling the scheme to be wound up” in a process that will take up to two years.

Boots Pension Scheme trustee chair Alan Baker said: “This agreement with Legal & General gives added protection to our members’ long-term benefits by removing market uncertainty and other financial exposures. We welcome the additional payment from Boots, in addition to the sum it has already committed. As a result, the scheme will not be reliant on Boots to pay benefits to members and pensions will be protected for decades to come.”

Boots UK managing director Seb James commented: “We are very pleased to have achieved the gold standard outcome for our pension scheme and to have fully secured the benefits of all members with a highly respected insurer. This will provide greater certainty to both the scheme members and to Boots, and is an excellent outcome for both parties.”

Legal & General CEO Kail described the buy-in as its “largest ever single transaction” and said it was “testament to our long-standing relationship with the client”.