Cable & Wireless insures pension scheme for £1 billion
David Woods, 03 September 2008
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Cable & Wireless has transferred over £1bn of defined benefit pension liabilities to Prudential.
The Cable & Wireless Superannuation Fund covers approximately 5,000 members. The ‘buy-in' means that Prudential will assume responsibility for the benefits payable to scheme members from 1 August 2008.
C&W will contribute £10 million in cash to the pension fund.
Tony Rice, group finance director at C&W, said: "C&W is committed to meeting our pension commitments to existing and former colleagues. The transaction materially reduces the fund's exposure to liabilities by over £1 billion. It also materially reduces the fund's and stakeholders' exposure to the future risk of adverse changes in actaturial assumptions and investment returns."
Actaturial consultancy Lane Clarke & Peacock advised the telco on the transfer. Partner Clive Wellsteed said: "Today's deal is the largest ever and follows a string of such transactions. It is a big vote of confidence in the market for passing pension risk to insurance companies."
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