UK-based underwriter Rothesay Life has signed a £115m bulk annuity insurance agreement with Western United Group Pension Scheme, to cover a portion of the pension liabilities associated with Vestey Group's pension scheme.
The transaction includes exchange of UK gilts for a bulk annuity insurance policy that offers close matching to the Trustees’ chosen portion of the scheme’s liabilities.
Vestey Group reward group head Ben Fowler said the buy-in policy agreement with Rothesay Life is part of the trustees’ and company’s long term plan to secure its members’ benefits by investing in assets that match the scheme’s liabilities.
This deal provides the company a secure, low risk asset, into which it could switch from its relatively highly-valued UK gilts, picking up cover against longevity risk and pension increase risk for a portion of the Scheme’s liabilities.
Lane Clark and Peacock advised the trustees of the Western United Group Pension Scheme on the transaction.
The Western United Group Pension Scheme, which serves nearly 14,000 members and owns assets of almost £500m, is the defined benefit scheme for current and former employees and employers belonging to the Vestey Group.
Founded in 2007, Rothesay Life offers regulated insurance services in the UK market for pensions de-risking, with over £10bn of liabilities and it wrote over £1bn of new bulk annuity business in 2012.
Rothesay Life is owned by The Goldman Sachs Group Inc, but is separately capitalized under UK insurance regulation.