The agreement with the Trustee of the Cable and Wireless Superannuation Fund relates to the final salary pension scheme and is expected to generate a premium income for Prudential of £100m on an APE basis.
CWSF will purchase a bulk annuity policy from Prudential, which will assume responsibility for the benefits payable to the Trustee to the CWSF pensioners for the life of the fund.
Prudential UK and Europe chief executive Nick Prettejohn says “This agreement is the largest of its kind in the UK this year and 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, particularly in volatile and uncertain market conditions. We believe that members of the CWSF will benefit from our considerable experience in the pensions and annuities markets.”
Cable and Wireless group finance director Tony Rice says: “We are delighted that the Pension Fund Trustee has secured this transaction which effectively reduces the Fund’s exposure to liabilities by over £1 billion. The buy-in materially reduces the Fund’s and shareholders’ exposure to the future risk of adverse changes in actuarial assumptions and investment returns. The involvement of a financial institution of Prudential’s quality should provide our pensioners with confidence that their fund will continue to be well-managed.”