The Xylem UK Pension Plan has completed a £255m bulk annuity transaction with Rothesay Life, protecting the benefits of over 2,500 final salary section members.

The transaction is structured as a full scheme buy-in, which is expected to move to buyout in future, at which point Rothesay will take full responsibility for paying members’ benefits going forward.

Members accrued their pension benefits while employed at water technology provider Xylem and previously related companies, and 1,100 are deferred members.

The plan’s trustee was advised by Aon and Freshfields Bruckhaus Deringer, while Rothesay Life was advised by Gowling WLG.

Xylem UK Pension Plan chairman, Brian Blackmore, said: “We are delighted to have secured benefits with Rothesay Life for our final salary section members. The transaction is a key step in our de-risking of the plan and delivers a superb outcome for our members by providing greater security of their benefits.

“We are pleased with the results and the key support provided to the trustee by our advisers throughout this complex transaction.”

Rothesay Life business development, Tom Seecharan, stated that the trustee had come with a “challenging but realistic price target and a preparedness to move quickly to exclusivity”, which he added was “an advantage in a busy market”.

Aon risk settlement senior consultant, Phil Curtis, said: “Aon proposed a full liability settlement journey for the plan in 2018, which combined member options and insurance, culminating with this Rothesay Life bulk annuity transaction in early 2020.

“Completing this journey required navigating through the busiest year in the history of the bulk annuity market and is an excellent result for the trustee, Xylem and the plan members.”

Share Story: