Pensions - Articles - Rothesay insures portion of risk in The Philips Pension Fund

 Rothesay Life, one of the leading life insurers specialising in providing de-risking solutions to UK defined benefit pension schemes, is pleased to announce that it has entered into a bulk annuity transaction with The Philips Pension Fund (the “Fund”). The Fund supports all the defined benefit pension obligations payable to the employees and former employees of listed Dutch electronics manufacture Philips in the UK

 Transaction highlights:

  

 The insurance policy is being held as an investment by the Trustee of the Fund and covers a £484m subset of liabilities owed to pensioners in payment and their contingent beneficiaries.

  

 UK gilts and cash that were held by the Fund have been exchanged for the insurance policy.

  

 The policy gives the Fund a secure, low risk asset with additional protections, including cover against longevity risk and pension increase risk.

  

 Administration and payment of Fund members’ benefits are unaffected by this transaction.

  

 This transaction is a further example of a large pension fund executing a mid-market transaction (£100m to £500m) in order to insure a portion of its liabilities, an area in which Rothesay Life has a key focus.

 Addy Loudiadis, CEO, Rothesay Life, said: “We are delighted that the Philips trustees have selected Rothesay Life to manage a portion of their risk in paying defined benefit pensions to their members.”
 She continued: “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.”