Pernod Ricard Group, Paris, insured £3.8 billion ($4.7 billion) in liabilities on behalf of its U.K. plan, the Allied Domecq Pension Fund, London, through a buy-in with Rothesay Life, the firm said Friday on its website.
The wine and spirits maker insured the majority of the plan's liabilities in the transaction, the firm said in a news release Friday. The buy-in covers the liabilities of about 17,000 retirees and some 10,000 participants who have yet to retire.
The deal follows other pension risk transfer megadeals this year, including Telent, Warwick, England, insuring £4.7 billion in liabilities in a full buyout deal with Rothesay Life on Thursday and Rolls-Royce, Goodwood, England, insuring £4.1 billion in liabilities for its £13 billion Rolls-Royce U.K. Pension Fund through a buyout with Legal & General Assurance Society in June.
U.K. trustees are finding that insuring their defined benefit plan liabilities has become more affordable because of higher funding levels, declining longevity expectations and falling insurers' fees.
Pernod Ricard's deal was the largest ever U.K. deal to include participants who have yet to retire — something insurers shunned in the recent years.
"This transaction reduces the group's exposure to long-term risks associated with the fund and is a significant milestone in the journey to secure the benefits earned by the group's employees and former employees as members of the Allied Domecq Pension Fund," said Cedric Ramat, Pernod's executive vice president, human resources, sustainability and responsibility, said in a separate news release.
Consultant Hymans Robertson advised on the deal. Legal advice was provided by law firm DLA Piper.
The total asset size of the plan could not be learned.