On the go: The Cadbury Mondelēz Pension Fund has completed a £520m buy-in with Rothesay Life covering payments for 1,900 pensioners.
The bulk annuity will be held as an asset of the scheme and the undisclosed premium was paid in gilts and cash.
The scheme began its derisking journey 10 years ago, with a £500m buy-in with Pension Insurance Corporation completed in 2009, and bulk annuities now account for 20 per cent of its £4.6bn total liabilities.*
The trustees of the Cadbury fund were assisted by the scheme’s in-house team and advised by Aon and Pinsent Masons, and Rothesay Life by Gowling WLG.
Commenting on the deal, Greg Chick, chairman of the trustees of the Cadbury Mondelēz Pension Fund, said: “The purchase of a buy-in policy with Rothesay Life provides an important contribution to the trustees’ ongoing objective of reducing risk in the scheme and to increase the security for all members of the fund. This is a significant step to derisk the scheme and our aim is to continue to do so in the future.”
John Baines, Partner at Aon, said: “This transaction is a great example of how patience can pay dividends when setting a long-term strategy. After supporting the trustee with their first £500m buy-in 10 years ago, we are now helping to provide even greater security to Cadbury Mondelēz Pension Fund members. Being able to articulate very clear objectives to insurers enabled the trustee to navigate the market and secure a particularly competitive deal.”
Sammy Cooper-Smith, business development at Rothesay Life, added: “We are delighted that the trustees of the Cadbury Mondelēz Pension Fund have chosen Rothesay Life to secure its pensioners’ payments. As part of its long-term derisking strategy we have been working closely with the scheme’s in-house team, which has led to a particularly smooth process.”
This transaction is a further example of the frenetic pace of pension buy-ins and buyouts, with a record £34bn of deals completed over the year to June 30 2019 announced yesterday by LCP, with buyout volumes expected to exceed £30bn this year.
*An earlier version of this article incorrectly stated that Cadbury's first buy-in was transacted with Rothesay Life.
