By Sarah Mortimer
LONDON, Jan 21 (Reuters) - Goldman Sachs's insurancearm has agreed to insure 115 million pounds ($182 million) ofliabilities of food distributor Vestey Group's retirement fund,making it the biggest player in the UK market for so-called bulkpurchase annuities.
Vestey's final salary-linked retirement plan, known as theWestern United Group Pension Scheme, is paying Goldman'sRothesay Life for a form of investment policy that will generateincome to cover payments to its 14,000 members, the insurer saidon Monday.
The transaction exchanged UK gilts for a bulk annuityinsurance policy to cover a portion of the pension liabilitiesassociated with Vestey's pension scheme, Rothesay Life said in astatement.
Rothesay, which launched in 2007 and acquired rivalPaternoster in 2011, said it wrote over 1 billion pounds of newbulk annuity business in 2012, and expects a "strong pipeline ofopportunities" for 2013.
Demand for bulk annuities has grown strongly in recent yearsas pension funds, hit by longer lifespans and volatile financialmarkets, seek to offload some of their obligations to insurers,which are financially stronger and more expert in handling risk.
In particular, British firms offering final salary-linkedpensions - known as defined benefit schemes - are struggling tocope with rising deficits, exacerbated by weak economic growthand repeated rounds of central bank easing, which havecontributed to a drop in the yield on British government bonds.
Meanwhile, UK specialist insurer Pension InsuranceCorporation completed a bulk annuity deal, which covers up to 30million pounds of liabilities for the pension fund of metalscompany Vesuvius, the insurer said on Monday.
The deal is the second bulk annuity transaction Pension Corphas completed with the Vesuvius retirement fund - called theCookson Group Pension Plan - following a 320 million pensioninsurance transfer deal in July 2012, Pension Corp.
The recent deal will cover the liabilities of employees thatretire in each of the next three years.
Defined benefit pension scheme deficits doubled to 231billion pounds last year, according to the Pension ProtectionFund.
Rothesay and Pension Corp compete with the likes of Legal &General, Aviva and Prudential in thebulk annuity market.