Rothesay Life and Telent agree UK’s biggest ever pension transfer deal

Insurer Rothesay Life and telecoms firm Telent have agreed a £4.7bn pension transfer deal – the largest ever made in the UK – covering the pensions of 39,000 people.

Companies are increasingly keen to offload pension liabilities to insurers, in deals known as buy-ins and buy-outs. The mammoth Rothesay deal smashed the record set in June when Legal & General took on £4.6bn of pensions from Rolls-Royce.

Telent said the deal would secure payments to 39,000 members of the GEC 1972 plan, many of whom were hired by GEC and Marconi – Telent’s previous incarnations.

“Our robust approach to risk management and the capital support from our shareholders allows us to give Trustees of large schemes confidence in our execution capability and continues to attract new clients,” said Rothesay Life’s Sammy Cooper-Smith.

“When compared to the much smaller Telent the transfer to Rothesay Life will substantially improve the security of members’ pension entitlements,” Telent said in a statement.

The deal will be completed in two parts. The scheme’s assets will first be transferred to Rothesay, which then provides funds to pay the pensions to Telent. In the second stage, Rothesay takes on direct responsibility for paying the pensions. The deal is expected to complete in 2022.

With the addition of the new schemes, Rothesay now has assets under management of over £46bn, and insures the pensions of over 800,000 people.

Last month, the high court made a surprise ruling to block the transfer of £12bn annuities from Prudential to Rothesay, in what would have been the largest such deal ever made. A decision on whether the companies will appeal the judgement is imminent.

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