LONDON Jan 21 Goldman Sachs's insurance
arm has agreed to insure 115 million pounds ($182 million) of
liabilities of food distributor Vestey Group's retirement fund,
making it the biggest player in the UK market for so-called bulk
Vestey's final salary-linked retirement plan, known as the
Western United Group Pension Scheme, is paying Goldman's
Rothesay Life for a form of investment policy that will generate
income to cover payments to its 14,000 members, the insurer said
The transaction exchanged UK gilts for a bulk annuity
insurance policy to cover a portion of the pension liabilities
associated with Vestey's pension scheme, Rothesay Life said in a
Rothesay, which launched in 2007 and acquired rival
Paternoster in 2011, said it wrote over 1 billion pounds of new
bulk annuity business in 2012, and expects a "strong pipeline of
opportunities" for 2013.
Demand for bulk annuities has grown strongly in recent years
as pension funds, hit by longer lifespans and volatile financial
markets, seek to offload some of their obligations to insurers,
which are financially stronger and more expert in handling risk.
In particular, British firms offering final salary-linked
pensions - known as defined benefit schemes - are struggling to
cope with rising deficits, exacerbated by weak economic growth
and repeated rounds of central bank easing, which have
contributed to a drop in the yield on British government bonds.
Meanwhile, UK specialist insurer Pension Insurance
Corporation completed a bulk annuity deal, which covers up to 30
million pounds of liabilities for the pension fund of metals
company Vesuvius, the insurer said on Monday.
The deal is the second bulk annuity transaction Pension Corp
has completed with the Vesuvius retirement fund - called the
Cookson Group Pension Plan - following a 320 million pension
insurance transfer deal in July 2012, Pension Corp.
The recent deal will cover the liabilities of employees that
retire in each of the next three years.
Defined benefit pension scheme deficits doubled to 231
billion pounds last year, according to the Pension Protection
Rothesay and Pension Corp compete with the likes of Legal &
General, Aviva and Prudential in the
bulk annuity market.