Rothesay Life has entered into bulk annuity transactions with two Smith & Nephew pension plans for £190m.

The Trustees of the Smith & Nephew UK Pension Fund and the Smith & Nephew UK Executive Scheme are covered in the transactions, which involved an exchange of UK gilts for a bulk annuity insurance policy that matches closely to the Trustees' chosen portion of their liabilities.

The transaction, which covers £190m of pension liabilities in total, gives the FTSE100 medical technology business secure, low risk assets and additional protections, such as cover against longevity and pension increase risk.

The policies are being held as investments by the Trustees and the administration and payment of members' benefits are unaffected by these transactions.

Rothesay Life said that the combined transaction is a further example of large pension schemes completing mid-market transactions worth between £100m to £500m to insure a portion of their liabilities.

Addy Loudiadis, Rothesay Life CEO, said: "This transaction illustrates the continuing trend for defined benefit pension schemes to use their gilts to purchase bulk annuities, which we saw develop last year.

"So far in this year, we have also seen strong interest in full buy-outs. The combination of these factors make us confident that 2013 will be a growth year for bulk annuities."

First published 29.05.2013

monique_simpson@wilmington.co.uk