The UK pension plan for Dutch multinational Philips has completed a £484m (€579m) buy-in with Rothesay Life, insuring liabilities related to its pensioner membership.
The insurer, currently wholly owned by Goldman Sachs, said in a statement that the Philips Pension Fund had exchanged Gilt and cash holdings for the policy covering all benefits and contingent beneficiaries associated with the scheme’s pensioners.
Addy Loudiadis, chief executive of Rothesay, said she was delighted the company had been selected to manage a “portion” of the scheme’s risk.
“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.”
The transaction comes only a month after Rothesay completed a £440m buyout for the InterContinental Hotels UK pension scheme, in itself a month after aerospace firm Cobham completed a £280m buy-in.
Commenting on activity this year, Towers Watson senior consultant Ian Aley said the market – having seen activity worth £5bn in 2013 – “continues at pace”.
“Schemes with Gilt investments are still taking the opportunity to exchange these for an annuity that provides a better match for their liabilities for little or no cost, and the rise in the equity market has meant buyouts might be within reaching distance for many schemes,” he said.
“Based on the transactions we have helped negotiate and the conversations we are having with insurers, the activity levels remain high, and the amount of buy-in and buyout business written this year should exceed £6bn.”
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