Smiths Group to de-risk pension libalities with £250m buy-in deal

FTSE 100 engineer Smiths Group is to de-risk its pension liabilities further with a £250m bulk buy-in agreement with an insurer.

The trustee of the Smiths Industries Pension Scheme has entered into a bulk annuity buy-in agreement with Pension Insurance Corporation, an insurer of defined benefit pensions, covering £254m worth of liabilities relating to over 3,000 legacy pensioners and dependants.

The agreement means that more than 25% of the company's total UK pension assets are now invested in buy-in policies to hedge against the impact of changes in inflation, interest rates and mortality assumptions for the related liabilities.

Chief executive Chris O'Shea said: "Working in partnership with the scheme trustee, we have made substantial progress in recent years to reduce risk and funding volatility and consequently we have a lower deficit and reduced funding obligations.”

Nicholas Godden, chair of the Smiths Industries Pension Scheme Trustee, added: "The company has worked closely with the trustee to de-risk the scheme and continues to support, and indeed encourage, reducing funding risk."