GSK agrees £900m pension buy-in deal with Prudential

Trustees of two of GlaxoSmithKline’s (GSK) pension plans have entered into bulk annuity contracts with Prudential.

The contracts have an aggregate value of approximately £900 million and cover around 15% of GSK’s UK defined benefit pensioner liabilities.

Under the terms of the agreement, Prudential will take on responsibility for a portion of the pensioner benefits payable by the trustees of the GSK Pension Scheme and the GSK Pension Fund.

GSK will continue to administer the scheme and fund, and the terms of the pension payments made to its scheme members will remain unchanged.

A statement from GSK said: “These policies will provide an income to the trustees of the pension plans to meet pensions in payment. They provide security to the trustees and reduce risk in the pension plans.

“GSK pensioners continue to be members of the GSK pension plans and will see no change in how their pensions are provided.”

Andrew Crossley, deputy chief executive at Prudential UK and Europe, said: “Prudential has a unique set of capabilities in the annuities market including extensive longevity experience, a superior investment track record and operational scale.

“Our strategy for bulk annuities is to participate selectively in the market and only enter into transactions which meet our strict requirements for return on capital.

“This agreement demonstrates our ability to complete complex and innovative transactions within the bulk annuity marketplace.

“Our financial strength and strong track record continue to be significant factors for pension scheme trustees looking for a safe and secure home for their pensions. We believe the GSK Pension Scheme and Pension Fund will benefit from our expertise and experience in the pensions and annuities markets.”

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