Rothesay Life completes £280m buy-in for Cobham scheme
UK – Aerospace firm Cobham has insured £280m (€325m) in liabilities with Goldman Sachs-owned Rothesay Life, the third such de-risking deal completed by the company.
The deal comes shortly after Rothesay parent Goldman Sachs confirmed it was looking to sell the UK pension insurance business.
The bulk annuity buy-in will see trustees of the scheme retain the policy as an investment and saw Rothesay accept a combination of Gilts and cash in payment, the insurer said in a statement.
Commenting on the deal, Rothesay chief executive Addy Loudiadis said: "This is Rothesay Life's tenth transaction worth more than £250m, and we are continuing to benefit from strong pension fund demand.
"The Cobham transaction further highlights Rothesay Life's robust business model and strong execution capabilities."
Tom Seecharan, deal manager at advising consultancy KPMG, noted that the deal was made possible by the "close collaborative working" between Cobham and its pension trustees.
"We were delighted to help run an efficient and thorough process that allowed both parties to take advantage of the attractive terms available from Rothesay Life for the mutual benefit of the members, trustees and sponsor," Seecharan said.
Cobham's CFO Simon Nicholls said the company had previously completed two smaller de-risking deals in late 2011, and that the new transaction marked a "significant step" towards de-risking while securing members' benefits.
The Cobham Pension Plan, closed to new entrants since 2003, has seen its deficit fall from more than £70m to £48.7m in the six months to June.
In that period, trustees also revised the fund's price and salary inflation assumptions upward by 0.4 percentage points to 3.4% and 3.9%, respectively.
Life expectancy for its male members retiring in 2045 remained constant at 25.8 years, the company added, but it increased the fund's discount rate to 4.7%, a 0.3-percentage-point hike over December.