Smiths Group (LSE:SMIN) has completed a £760 million bulk annuity buy-in with M&G, securing benefits for more than 10,000 members of the Smiths Industries Pension Scheme.
The transaction means all roughly 17,000 members of the scheme, the largest defined benefit pension fund Smiths sponsors, are now fully insured across five annuity policies with M&G's Prudential Assurance Company, Canada Life, and Pension Insurance Corporation.
The Trustee funded the deal entirely from the scheme's existing assets, requiring no additional contributions from Smiths.
It follows the £900 million buyout of Smiths' other principal UK scheme, the TI Group Pension Scheme, completed in May, which now has its benefits paid directly by Aviva, Legal & General, Pension Insurance Corporation and Rothesay.
The moves land in Smiths' 175th anniversary year, alongside the completed sales of Smiths Interconnect and Smiths Detection, which the company says mark the end of its transformation into a focused industrial technology group specialising in flow control and thermal solutions.
"These transactions provide greater financial security for our scheme members, removes pension risk and future cash funding requirements and reduces balance sheet volatility", said Julian Fagge, Chief Financial Officer.
Nicholas Godden, Chair of the Trustee of the Smiths Industries Pension Scheme, said all members are now covered by an insurance policy that leaves their benefit entitlements unchanged.
News Intelligence what this means for the company
Smiths Group has completed a £760 million pension buy-in covering over 10,000 members of its largest defined benefit scheme, fully insuring all roughly 17,000 members across the scheme. The transaction required no additional cash from the company, as the trustee funded it entirely from existing scheme assets, and follows a £900 million buyout of another major UK pension scheme in May—together representing the completion of Smiths' de-risking of its two principal defined benefit liabilities.
The completion removes future pension cash funding requirements and reduces balance sheet volatility for Smiths, eliminating a material source of financial uncertainty. The transaction itself is a balance-sheet neutral de-risking move.
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