UK’s NatWest signs largest-ever pension outsourcing deal
EDINBURGH, UNITED KINGDOM — NatWest Group, one of Britain’s leading banking institutions, has made history by securing an £11 billion ($14.3 billion) pension outsourcing agreement with Rothesay, marking the largest transaction of its kind in UK corporate history.
Record-breaking pension transfer details
The landmark deal involves transferring approximately one-third of NatWest’s £33.6 billion ($43.6 billion) pension scheme to Rothesay, a specialist insurance company known for its pension risk transfer (PRT) expertise.
This strategic move affects a portion of the bank’s retirement scheme, which currently serves around 190,000 members.
“As part of its long-term strategy, the trustee of the Natwest Group Pension Fund has insured around one-third of the main section with buy-in policies,” a NatWest Group Pension Fund spokesperson said.
“The buy-in policies are fund investments that further improve the security of member benefits by increasing protection against demographic and investment risks.”
Impact on NatWest’s pension members
The arrangement ensures continuity for pension scheme members, with the spokesperson confirming that “there is no change to member benefits and members will continue to receive their benefits directly from the Fund”.
The group’s move aligns with a broader industry trend towards PRT deals, where companies seek to manage long-term risks by transferring liabilities to specialized insurers.
The deal represents a milestone in the pension risk transfer market, surpassing previous notable transactions such as Boots’ £4.8 billion ($6.2 billion) agreement with Legal & General. It demonstrates NatWest’s commitment to securing long-term stability for its pension scheme while optimizing its financial management structure.
