Smiths Group plc (“the Company”) announces today that the Trustee of the Smiths Industries Pension Scheme (the “Scheme”) has entered into a bulk annuity buy-in agreement with Pension Insurance Corporation, a specialist insurer of defined benefit pension funds.
This agreement is the latest step in the Company’s policy of progressively de-risking pension liabilities. The buy-in policy covers liabilities totalling £254 million relating to over 3,000 legacy Scheme pensioners and dependants.
Chris O’Shea, Chief Financial Officer, said:
“Today’s agreement is a further material step towards the de-risking of Smiths Group’s pensions funding obligations. Working in partnership with the Scheme Trustee, we have made substantial progress in recent years to reduce risk and funding volatility and consequently we have a lower deficit and reduced funding obligations. We will continue to work with the Trustee to consider further opportunities to de-risk the Scheme.
“As part of our overall approach to de-risking, today’s agreement means that more than 25% of the Company’s total UK pension assets are now invested in buy-in policies that provide an effective hedge against the impact of changes in inflation, interest rates and mortality assumptions for the related liabilities.”
Nicholas Godden, Chair of the Smiths Industries Pension Scheme Trustee, said:
“This buy-in is a significant step in our de-risking plan and we are very pleased to have been able to complete it at this point. The Company has worked closely with the Trustee to de-risk the scheme and continues to support, and indeed encourage, reducing funding risk.”