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Rothesay Life completes £500m Vestey Group buy-out

21 August 2014

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 completed a £500 million buy-out of the Western United Group Pension Scheme (the “Scheme”). The buy-out was concluded with a £280 million bulk annuity.

  • Today’s transaction is the final one of three bulk annuity deals between Rothesay Life and the Scheme; the insurer had previously secured over £220 million of the Scheme’s liabilities
  • Now that the liabilities for current and former employees of the Vestey Group are fully secured, the transaction is expected to result in the Scheme starting to wind up.
  • Rothesay Life has now completed 6 of the 10 largest pension buy-outs

Rothesay Life’s Managing Director, Tom Pearce, said: “It is always satisfying when clients return for repeat business and we are pleased to have been able to support Vestey in achieving its objective of a full buy-out of its defined benefit pension scheme in three transactions in under two years. In 2014, we continue to see growing demand for full buyouts from corporates. Rothesay’s leading position in this market is demonstrated by our completion of 6 out of the 10 largest such transactions.”

Peter Thompson of BESTrustees, Trustee Chair of Western United Group Pension Scheme, said: “Earlier in the year the Trustees were not expecting a full buy-out to be achievable for some time. So we were very pleased that Rothesay Life, in conjunction with our pensions team, were able to move very quickly to deliver a comprehensive solution and provide security for our members well ahead of schedule.”

Ben Fowler, Group Head of Reward for Vestey Group Ltd, said: “This is a very positive outcome both for Scheme members and for the Vestey Group. Less than two years ago we could not have envisaged securing a full buy-out over this timeframe. It requires a great deal of preparation and collaborative effort to complete these deals and we have been fortunate to have a committed group of trustees, advisers and Rothesay Life to help make this happen.”

For further information please contact:
Temple Bar Advisory Limited +44 (0)20 7002 1080
Alex Child-Villiers or William Barker

About the Western United Group Pension Scheme and its sponsoring employer, the Vestey Group

The Western United Group Pension Scheme is the defined benefit pension scheme for current and former employees and employers belonging to the Vestey Group. It has around 14,000 members and assets of approximately £500m.

The Vestey Group is a fifth generation family owned food and farming business, incorporating nine international food companies (which form the Vestey Foods Group), a premium quality mail order meat business (Donald Russell), as well as extensive farm interests in South America and premium wine investments in Australia.

About BESTrustees

BESTrustees is one of the UK’s leading independent trustee companies. It is completely independent and solely focused on the provision of trustee and affiliated trustee services for all types of pension arrangements. This gives BESTrustees freedom from the conflicts of interest that can affect both lay trustees and pension fund advisers, and ensures continuing independence and professional integrity.

About Rothesay Life

Rothesay Life was established in 2007 and has become one of the leading providers of regulated insurance solutions in the UK market for pensions de-risking, with over £15 billion of insurance contracts. In 2013, Rothesay Life wrote £1.6 billion of bulk annuity premiums following the £1.3 billion written in 2012. This strong growth has been achieved through the steady accumulation of pension scheme clients.

Existing Rothesay Life clients include the pension schemes and members associated with such names as RSA, British Airways, Rank, Uniq, General Motors, the MNOPF (Merchant Navy Officers Pension Fund), InterContinental Hotels, Philips and GKN.

Rothesay Life is a secure long-term provider of pensions, focused on:

  • a flexible and committed approach to execution;
  • ongoing risk management to maintain balance sheet strength; and
  • robust operational processes.

Rothesay Life is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.
Key terms:

Bulk annuity – An insurance policy through which a pension scheme can secure the retirement income payable to a group of people in exchange for paying a premium to the insurer. In taking out the insurance policy, the pension scheme is purchasing protection against all risks associated with paying defined benefit pensions including longevity, inflation and investment performance risks.

Buy-in – A bulk annuity insurance policy held as an asset of a pension scheme, paying income to the pension scheme that is reference (only for the purposes of calculating the amount of income payable) to an agreed group of members and their benefits. The income from a buy-in benefits all members of the pension scheme, not just those against which it is referenced.

Buy-out – A bulk annuity policy that is structured to convert to a set of individual annuity policies (at the election of the pension scheme’s trustees) following the wind-up of the pension scheme. The individual annuity policies are written in the names of the members against which the bulk annuity policy had been referenced.

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