Akzo Nobel N.V. (AkzoNobel) today announces that the trustees of the Akzo Nobel (CPS) Pension Scheme in the United Kingdom have entered into a longevity insurance contract with Swiss Re.
contract covers €1.75 billion (£1.4 billion) of UK pension liabilities, relating to almost 17,000 current pensioners and their dependants. It was written through ReAssure Ltd, Swiss Re’s UK insurance subsidiary. The contract was signed this week, but is effective from August 1, 2011. The cost of this transaction will be borne by the scheme and will have no material effect on the funding arrangements.
Nichols, CFO of AkzoNobel, said: “This transaction supports our ambition to de-risk our pension liabilities over time, at an attractive price without requiring additional funding from AkzoNobel. We have been working with the trustees of the Courtaulds Pension Scheme on this specific opportunity to reduce longevity risk. The contract will help protect AkzoNobel against the exposure of life expectancy risks.”
Waterbury, Chairman of the Pension Scheme trustees, added: “As our members live longer, entering into this contract makes their benefits more secure by removing uncertainty from future funding arrangements, thus reducing our reliance on the company. Our pensioners will continue to receive the same pensions and the same annual increases as they do currently.”
and the trustees were advised by Towers Watson on the selection of Swiss Re and contract negotiations. The trustees received legal advice from Travers Smith.