Smiths Group said it had completed a £640m bulk annuity buy-in with Rothesay Life to de-risk one of its pension schemes.
The agreement to secure the remaining uninsured pension liabilities applies to its TI Group scheme, which has 21,000 members.
It is the scheme’s seventh and final buy-in, and ensures £1.4bn of liabilities are now fully matched by insurance policies, and that Smiths “no longer bears any investment, longevity, interest rate or inflation risk”, the company said in a statement on Thursday.
Smiths was not required to make a cash contribution and the final buy-in has been secured with a commitment to fully buy-out the scheme over the next few years.
“The buy-in means that the remaining accounting surplus in respect of the scheme will be extinguished and expensed through the Smiths Group income statement in FY2022,” the company said.
Smiths’ other material UK defined benefit pension scheme, the Smiths Industries Pension Scheme, is not impacted by the agreement and the firm continues to pursue a similar de-risking strategy with its trustee.
Reporting by Frank Prenesti at Sharecast.com
