Rothesay Life agrees £520m buy-in with Cadbury Mondelēz Pension Fund

UK-based life insurer Rothesay Life has insured £520 million of defined benefit liabilities for the Cadbury Mondelēz Pension Fund.

The bulk annuity transcation covers payments for c.1,900 pensioner members. It will be held as an asset of the pension scheme.

The deal represents the second tranche of de-risking following a £500m buy-in in 2009, and takes the scheme’s insurance to c.20 percent of a total £4.6 billion liabilities.

Rothesay Life said that the premium was paid in gilts and cash which will be reinvested in line with its low risk, long-term investment strategy.

Sammy Cooper-Smith, business development at Rothesay Life, said: “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 de-risking strategy we have been working closely with the scheme’s in-house team which has led to a particularly smooth process. We look forward to continue working with them to deliver these members’ benefits.”

Greg Chick, chairman of the Trustees of the Cadbury Mondelēz Pension Fund, said: “We’re pleased to announce the next step in a long-term de-risking strategy with the purchase of a buy-in policy with Rothesay Life, which 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 de-risk the scheme and our aim is to continue to do so in the future with good partners like Rothesay Life and Aon.”

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.”

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