Cobham enters bulk-annuity contract for DB pension

Aerospace and defence organisation Cobham has entered into a bulk-annuity transaction for its defined benefit (DB) pension scheme.

The transaction, with insurer Rothesay Life, covers £280 million of pension liabilities.

The policy, which is being held as an investment by the trustees, gives the organisation a secure, low-risk asset with additional protections, such as cover against longevity risk and pension increase risk.

The organisation was advised by KPMG and the trustees were advised by Lane Clark and Peacock (LCP).

Simon Nicholls, chief financial officer at Cobham, said: “This transaction, which was prefaced in the group’s 2012 financial statements and follows two smaller buy-in transactions on separate defined benefit pension plans completed in 2011, represents a significant step towards de-risking the group’s defined benefit pension plans using its assets and adds further levels of security to the plan’s obligations towards its members.”