UK supermarket Safeway has fully derisked its pension scheme after completing a £1.4bn ($1.75bn) buy-in transaction with insurer Rothesay Life.
The Safeway Pension Scheme is sponsored by UK retailer WM Morrisons and the latest deal means that the future pension benefits of nearly 23,00 members — comprising 7,200 pensioners and dependants, plus over 15,000 deferred members —are now fully insured.
This is the second buy-in deal between the two parties and means that Rothesay, which touts itself as the UK’s largest specialist pension insurer, has derisked a total of £2.1bn of the retailer’s pension liabilities.
Stephen Caine, Manchester-based director at actuarial consultants WTW recently , that changes in financial market conditions meant schemes are much better funded on an insurance basis than before, a view which was confirmed by Rothesay in its press release which said that the deal had come at no cost to Safeway.
Aon acted as broker for both the pension scheme trustees and Rothesay. Clifford Chance provided legal advice to the supermarket chain while DLA acted for the insurer.
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