L&G revealed it had completed the UK's largest medically underwritten bulk annuity with a UK defined benefit pension scheme, in December 2015.

Both Kingfisher and L&G have now revealed further details of the transaction.

The deal means L&G has secured a GBP 230million medically underwritten buy-in with the Kingfisher Pension Scheme, covering 149 specific scheme members from the GBP 3bn scheme.

Clive Gilchrist, chair of the trustees for the Kingfisher Pension Scheme, said the annuity provides a further improvement to the financial security of the scheme for all its members.

"This is another important step for us on our journey towards a target of self-sufficiency by 2030," he said.

The transaction incorporates several innovative features, including a "top slice" approach, which is when there are a smaller number of members representing a larger proportion of the value of the liabilities within a particular scheme.

It also has what it described as a "gilt lock solution" and pre-agreed pathway legal contracts.

Under a gilt lock solution, insurance pricing moves in line with a specified portfolio of gilts over the contracting period – this helps provide transparency and certainty to the scheme during the implementation process.

Head of strategic business and pension risk transfer at L&G, Cheryl Agius, said the company's experience and financial strength made it ideally placed to help pension schemes.

She said: "Many companies are weighed down by pension deficits and affordability is a key consideration for schemes and sponsoring companies when transferring risk to an insurance company.

"We believe growth in the top slicing approach is set to continue and, for many schemes, will be the first step on a journey to full buyout.

"Medically underwritten bulk annuities were traditionally viewed as a solution for smaller schemes and the emergence of top slicing helps open up medical underwriting to medium and larger schemes as well."

First published 01.04.2016

Lindsay.sharman@wilmingtonplc.com