The trustee of Pernod Ricard’s largest pension plan in the UK has signed an agreement to insure the majority of the pension plan’s pension liabilities through the purchase of a bulk purchase annuity contract.
The agreement of the bulk purchase annuity contract which is expected to be completed shortly would imply a reduction of Group equity, estimated at circa €0.9bn.
This transaction is in line with a history of de-risking and long-term strategic objectives of both the Group and the trustee of the pension plan. It is a further step in providing long-term security for payment of the pension plan liabilities. The agreement reduces the Group’s exposure to funding deficits arising from market risks, including inflation and interest rate risks, and longevity risks.
The bulk purchase annuity contract is a policy in the name of the trustee, commonly known as a “buy-in,” which will cover the trustee’s obligations in respect of the relevant pension liabilities. The trustee will remain responsible for the payment and administration of all pension liabilities.