Pension fund moves to secure liabilities

Rothesay Life, the provider of de-risking solutions to defined benefit (DB) pension schemes, has carried out a bulk annuity transaction with the Philips Pension Fund covering £484 million of liabilities.

Under the transaction, the trustees of the Philips Pension Fund will hold an insurance policy covering liabilities for pensioners and their beneficiaries. The policy was given in exchange for UK Gilts and cash held by the fund. In return for the Gilts and cash paid, the trustees will be protected against longevity risk and pension increase risk. Rothesay Life said the transaction was an example of a mid-market deal (£100 million to £500 million) with a large pension fund that wanted to secure part of its liabilities.

Rothesay Life CEO, Addy Loudiadis, commented: “Rothesay Life was able to provide both the trustees and the sponsoring employer with the price certainty they required, by locking our economics to a portfolio of assets already held by the fund, immediately on being selected as the chosen insurer.”