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Smith & Nephew's two final salary-linked retirement plans - the UK pension fund and the UK executive scheme - are paying Goldman's Rothesay Life for a form of investment policy that will generate income to cover payments to members, the insurer said on Wednesday.
Demand for such insurance has grown strongly because many British pension funds, hit by longer lifespans and low investment returns, are struggling with rising pension deficits and are looking for ways to offload some of their obligations.
Rothesay expects the UK market for these deals - known as bulk annuities - to reach 5-6 billion pounds this year, up from 4 billion last year.
Rothesay, which launched in 2007 and acquired rival Paternoster in 2011, said it wrote more than 1 billion pounds of new bulk annuity business in 2012.
The insurer did the biggest bulk annuity deal in 2012 with the Merchant Navy Officers Pension Fund at 680 million pounds.
($1 = 0.6651 British pounds)
Reporting by Sarah Mortimer. Editing by Jane Merriman