Goldman Sachs subsidiary Rothesay Life has purchased Rank Group plc’s pension scheme for approximately £700 million. It is thought to be the largest transfer of pension scheme liabilities in the UK to date.

Goldman Sachs subsidiary Rothesay Life has purchased Rank Group plc’s pension scheme for approximately £700 million. It is thought to be the largest transfer of pension scheme liabilities in the UK to date.

Addy Loudiadis, Rothesay Life chief executive, says: “The market for insurance based buy-outs of large pension schemes is developing rapidly. Companies and trustees are increasingly looking for effective solutions to transfer pension liability risk to specialist insurance providers. Rothesay Life is ideally placed to become a leading player in this market.”

Peter Gill, finance director of Rank, comments: “With the financial benefits that this transfer provides, Rank will be better placed to address its near-term challenges and to grasp its long-term opportunities. In addition, members of the scheme will benefit from the security provided by Rothesay Life.”

Deloitte was lead adviser on pensions and tax structuring to the acquirer. The team was led by Feargus Mitchell, head of pensions, assisted by specialists from pensions actuarial, insurance, tax and accounting, including Nigel Pickard, Mark Jones and Ian Barnes, among others.

“We have worked with Goldman Sachs/Rothesay Life over the last year to design a commercial structure that provides certainty and speed of execution for the seller and ceding trustees,” explains Mitchell.

He adds: “This is the largest deal of its type in the fast growing pensions buy-out market. Developments here will be of interest to any corporate with a defined pension plan, and this deal is a signpost for further extensive activity in this space.

“Rothesay Life is taking a scaleable, replicable and flexible structure to market; scaleable, because the structure works for pension schemes of different sizes and complexity; replicable, because significant investment has been made to cover the bases in a technically complex area; and flexible, because no two pension schemes or deal situations are identical.”

HSBC was adviser to the Rank Group on the transfer of its pension plan to Rothesay Life. Jonathan Sarkar, head of corporate consulting at HSBC Actuaries and Consultants, led the team.

“HSBC Actuaries has advised Rank Group since early 2006,” comments Sarkar. “We were responsible for advising Rank as the employer and sponsor to the pension plan and acted as an intermediary between the employer, trustees and Rothesay Life.

“The buy-out, which was first conceived by HSBC Actuaries in early 2007 is the first deal by Rothesay Life, involving more than 19,000 pension scheme members.”