good news14 Jul 2009 21:56
Insurance group RSA has taken out a £1.9bn insurance policy with Goldman Sachs against higher pension costs.
“This action covers around one third of the Group’s total UK pension schemes’ liabilities, representing over 55% of the liabilities relating to pensions in payment,” said the group.
The move is aimed at reducing the risk to the group of its pensioners living longer but also stock market risk and changes in interest rates.
“This transaction with Goldman Sachs International and Rothesay Life allows the UK schemes to take advantage of market conditions to enhance returns and so eliminate inflation, interest rate and longevity risk on around one third of the schemes’ liabilities,” it said.
RSA said the transaction has no impact on group earnings in 2009 but is expected to generate a small profit from 2010.
RSA chief executive Andy Haste said: “This transaction further de-risks the impact of the UK pension schemes on the Group’s results and balance sheet.”