Rothesay Life Insures GM’s UK Pension Fund image

Goldman Sachs unit Rothesay Life has agreed to offer GM’s employees in the UK, a $370.68 million deal to insure a retirement fund.

This is the second deal between GM and Rothesay, which agreed to pay pensions to the funds’ retired members only, in exchange for part of the funds’ assets. From GM, Rothesay Life takes 11,000 retired employees and £230 million of assets.

Rothesay, has made a similar deal with the Merchant Navy Officers’ Pension Fund, from which the insurer takes on 40,000 retired seafarers and £680 million of assets. This is the biggest pensions buy-in so far this year. With so many assets Rothesay might get in the impossibility of paying the pensions.

This year, the pensions insurance transactions have been slower than expected, due to the market conditions, which have also had an impact on the value of all pension schemes’ typical investments. The Merchant Navy fund chairman, Peter McEwen, said that the company has been helped by a conservative investment policy, planned for many years for securing such a deal.

“By the time we transacted, the portfolio was broadly in line with what an insurer would invest in anyway. We took our equities exposure down to zero, and our property exposure too, and are invested mainly in gilts and corporate bonds,” said Peter McEwen.