Prudential UK enters into buy-in contracts with GSK
GSK has purchased bulk annuity policies from Prudential
Prudential UK has entered into two bulk annuity buy-in contracts with the Trustees of the GlaxoSmithKline (GSK) Pension Scheme and the GSK Pension Fund for a tranche of pensioner members within their defined benefit pension schemes.
Prudential said the transactions cover around 15% of GSK's UK defined benefit pensioner liabilities and have an aggregate value of approximately £900m.
Under this agreement, GSK has purchased bulk annuity policies from Prudential which will take on responsibility for a portion of the pensioner benefits payable by the Trustees of the GSK Pension Scheme and 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.
Prudential UK and Europe deputy chief executive Andrew Crossley said the company's strategy for bulk annuities is to participate selectively in the market and only enter into transactions which meet the company's strict requirements for return on capital.
This contract will be recorded for accounting purposes within Prudential's fourth quarter results for 2010, Prudential added.