Smiths Group plc (“Smiths” or “the Group”) announces that the Trustee of the TI Group Pension Scheme (“Scheme”) has completed a deal to secure its remaining uninsured pension liabilities, by way of a £640 million bulk annuity buy-in with Rothesay Life plc (“Rothesay”). Establishing the best outcome for the widest group of stakeholders was paramount, and today’s agreement means all the Scheme’s liabilities are now insured, delivering security for the Scheme’s 21,000 members, while removing future risk for Smiths.
It is the Scheme’s seventh and final buy-in, and largest step in a well-established de-risking strategy. The Rothesay policy ensures the Scheme’s £1.4bn of liabilities are now fully matched by insurance policies, and that Smiths no longer bears any investment, longevity, interest rate or inflation risk in respect of the Scheme. The buy-in transaction did not require Smiths to make a cash contribution.
The final buy-in has been secured with a commitment to fully buy-out the Scheme over the next few years. The buy-in means that the remaining accounting surplus in respect of the Scheme will be extinguished and expensed through the Smiths Group income statement in FY2022.
Smiths’ other material UK defined benefit pension scheme, the Smiths Industries Pension Scheme (“SIPS”), is not impacted by the agreement and Smiths continues to pursue a similar de-risking strategy with its Trustee
Paul Keel, CEO of Smiths Group, said:
“This transaction represents an excellent outcome for Scheme members, Smiths and our shareholders. We have supported the Scheme over many decades and made significant cash contributions. That funding, combined with excellent stewardship by the Scheme’s Trustee, has meant that the Scheme can now be fully de-risked for the benefit of members and the Group.
Importantly, the successful execution of this transaction means Smiths can focus future investments on our strategy to accelerate growth, improve execution and support our great people.”
Jemma Spalton, Smiths Group
+44 (0)7867 390 350
Stephanie Heathers, Smiths Group
+44 (0)7584 113 633
Alex Le May, FTI Consulting
+44 (0)7702 443 312
Legal Entity Identifier (LEI): 213800MJL6IPZS3ASA11
About Smiths Group
For over 170 years, Smiths Group has been pioneering progress by improving the world through smarter engineering. We serve millions of people every year, to help create a safer, more efficient and betterconnected world, across four major global markets: Energy, General Industry, Security & Defence, and Aerospace. Listed on the London Stock Exchange, Smiths employs c.14,600 colleagues in over 50 countries. For more information visit www.smiths.com.
Rothesay is the UK's largest pensions insurance specialist, purpose-built to protect pension schemes and their members’ pensions. With over £60 billion of assets under management, we secure the pensions of more than 830,000 people and pay out, on average, approximately £240 million in pension payments each month.
Rothesay is dedicated to providing excellence in customer service alongside prudent underwriting, a conservative investment strategy and the careful management of risk. We are trusted by some of the UK’s best known companies to provide pension solutions, including the schemes of Allied Domecq, Asda, British Airways, Cadbury’s, the Civil Aviation Authority, National Grid, the Post Office, Prudential and telent.
Rothesay has two substantial institutional shareholders, GIC and Massachusetts Mutual Life Insurance Company (“MassMutual”), who provide the company with long-term support for its growth and development. In September 2020, our shareholders increased their investment in Rothesay through a transaction which valued the business at £5.75bn.
Rothesay refers to Rothesay Limited and its subsidiaries and is the trading name for Rothesay Life Plc, an insurance company authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Firm Reference Number: 466067. Rothesay Life Plc is registered in England and Wales with company registration number: 06127279 and registered address: Rothesay Life Plc, The Post Building, 100 Museum Street, London WC1A 1PB. Further information is available at www.rothesay.com