Thales UK Pension Scheme has completed a £2.7bn transaction with Rothesay securing the benefits of all its members.

The transaction is facilitated by an upfront cash commitment from Thales, a global high technology leader, transferring the obligation and risk associated with these pension liabilities from Thales to Rothesay.

The insurance transaction secures the benefits for all members of the scheme which includes defined benefit (DB) liabilities for 10,512 pensioners and dependants and a further 5,915 deferred members.

As part of the insurance premium Rothesay accepted a number of illiquid assets, held in the scheme’s investment portfolio.

The company was advised by the lead transaction adviser, PWC and A&O. Rothesay received legal advice from Travers Smith. Gowling WLG, Mercer and Momentum advised the scheme trustee.

Peter Rowley, chair of trustees, said: “We are delighted to have secured long-term security for all our pension scheme members in a single buy-in transaction. We are grateful to our sponsor for making this buy-in achievable and to our advisers and Rothesay for their collaborative efforts to execute what was a complex transaction.”

Paul Durrant, director of compensation and benefits at Thales UK, said: “This has been an important transaction to the sponsor where we have had to work through a number of new challenges and are therefore pleased that we have been able to secure the pension benefits of over 16,000 current and past employees.”

He added that the advisory teams as well as Rothesay have skilfully navigated the complexities involved in the transaction, quickly finding optimal solutions where needed and completing it in a short space of time.

“This is a hugely successful outcome for us and helps us to meet our corporate objectives,” he said.

Sammy Cooper-Smith, head of business development at Rothesay, said: “Our extensive execution capabilities, particularly in relation to large and complex transactions, meant we were able to work with the trustee and sponsor to successfully navigate a number of unique aspects of this transaction quickly, including deferred premiums, purchasing and underwriting of illiquid assets and completing residual risk due diligence.”

Cooper-Smith added: “As we near the end of one of our busiest ever years, 2024 is already looking incredibly exciting for the bulk annuity market with an unprecedented pipeline as an even greater number of schemes seek insurance solutions.”

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