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Rothesay Life insures 2nd portion of Vestey pension liabilities

10 April 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 entered into a £111 million bulk annuity transaction with the Western United Group Pension Scheme (the “Scheme”), securing a further tranche of the Scheme’s pensioner liabilities for current and former employees of the Vestey Group.

  • The transaction involved an exchange of cash and UK gilts for a bulk annuity insurance policy that provides close matching to the Trustees’ chosen portion of the Scheme’s liabilities
  • Since the buy-in policy has been purchased as an investment by the Scheme, the administration and payment of members’ benefits are unaffected by this transaction
  • This transaction is the second insurance contract between the Scheme and Rothesay Life following last year’s £115m policy

Over the last 12 months Rothesay Life has written £1.7 billion of new business and reports a strong pipeline of opportunities, which are expected to produce a flow of new business into 2015.

Rothesay Life CEO, Addy Loudiadis, said: “Repeat business is the best endorsement. Vestey has returned to insure more of their pension liabilities with Rothesay Life, the fifth time in recent years that a client has done so.

She continued: “We are continuing to see interest from trustees and their corporates in derisking their pension liabilities and 2014 is on track to be a record year. Those that can react quickly and efficiently to opportunities, like Vestey, are likely to achieve the best outcomes.”

Ben Fowler, Group Head of Reward for Vestey Group Ltd, said: “For many years now, we have been working hard to fully de-risk this scheme, and this transaction is the next step in that journey. We returned to Rothesay Life because they provided a low-risk solution with operational precision and accompanying longevity, pension increase and re-investment protection.”


For further information please contact:
Temple Bar Advisory Limited +44 (0)20 7002 1080 or +44 (0)78 2796 0151
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 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 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 £12 billion of insurance contracts (before the addition of Met Life Assurance). In 2012, Rothesay Life wrote over £1 billion of new bulk annuity business and has since the start of 2013 written £1.9 billion. 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 Regulatory Authority and regulated by the Financial Conduct Authority and the Prudential Regulatory 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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