Natwest Group agrees £11bn buy-in with Rothesay

Written by Sophie Smith

07/11/2024

Natwest Group has agreed a buy-in transaction with a third party insurer, with around a third of the main section of its defined benefit (DB) pension scheme now covered by insurance policies.

According to reports in Sky News, the pension trustees transferred around £11bn of assets to purchase the pension buy-in with Rothesay.

The group's Q3 results also confirmed that the trustee of the NatWest Group Pension Fund entered into a buy-in transaction with a third party insurer for some of the liabilities of the main section in September 2024.

As a result, around a third of the main section is now covered by insurance policies that give protection against demographic and investment risks, improving security of the member benefits.

LCP partner, Charlie Finch, said that Natwest is the "latest in a string of large blue-chip companies whose pension scheme has used insurance buy-ins to manage their risks", noting that improved pension funding since 2022 has made it much more affordable to de-risk.

"With a reported size of around £11bn, the buy-ins by NatWest’s pension trustees would be the largest volume insured by any UK pension scheme to date, narrowly ahead of the c£10bn insured by the ICI Pension Fund," he continued.

"It follows the well-established approach of using multiple phased buy-ins to insure some or all of their liabilities – in this case around a third.

"2024 is proving to be another busy year and we’re expecting over £40bn of pension assets to be transferred to insurers to purchase buy-ins.”

Related Articles