GSK in record derisking deal with Prudential

The pharmaceutical giant is seeking to secure member benefits for a portion of its £4bn funds before the end of the year.

The exact format of the deal is unclear, although Prudential is best known for operating in the bulk buyout and annuity market, which would make this the largest such deal in the market’s history.

According to its latest results, GSK’s schemes had a £2.26bn deficit at the end of June this year, up more than £500m from the end of 2009. This is despite the sponsor making surplus contributions of more than £1bn since the start of 2008.

Pensions Week , schemeXpert.com 's sister title, revealed earlier this year the insurer is close to two major deals with its future premium product , which offers schemes longevity, interest rate and inflation hedges, but with no premium for 10 years, after which Prudential enacts a pensioner buy-in at a predetermined price.

A GSK spokesman said: “GSK works closely with the trustees of its pension plans to ensure that plan benefits continue to be managed and delivered appropriately and in accordance with all requirements.

“We regularly review the investments and assess opportunities to remove risk. Any arrangement considered is always in the best interest of members."

Prudential declined to comment.