Coats U.K. Pension Scheme, Bristol, England, has completed a £1.3 billion ($1.7 billion) buy-in from the Pension Insurance Corp., derisking 80% of its liabilities, according to a news release.
As a result of the buy-in, “all the financial and demographic risks relating to the scheme’s liabilities are now fully hedged,” the release said. This is further to Aviva’s purchase of a bulk annuity for 20% of Coats Pension Scheme’s liabilities in December 2022.
This buy-in is the final and most significant step in Coats’ ensuring its U.K. pension obligations, with the agreement anticipated to require up to $128 million of additional funding from Coats.
Jackie Callaway, chief financial officer at Coats, said in the release: “The purchase of this bulk annuity policy represents a critical final step in de-risking our U.K. defined benefit pension scheme. It means we have achieved our ultimate plan of fully ensuring the scheme’s pension liabilities in a cost-effective manner, and should allow us, in due course, to remove it from our balance sheet.”
Coats Group is a manufacturer for apparel, footwear and performance materials, with over 17’000 employees and revenue of $1.4 billion in 2023.
