Slaughter and May is advising Walmart Inc. in relation to the buy-in and subsequent buy-out of the Asda Group Pension Scheme with Rothesay Life Plc

18 Oct 2019

ASDA and the Trustee of the Asda Group Pension Scheme (“the Scheme”) supported by Walmart Inc. (“Walmart”) today announce an agreement for a bulk annuity insurance ‘buy-in’ for the Scheme with Rothesay Life Plc (“RL”), a specialist insurer of defined benefit pension schemes. The Scheme has liabilities of £3.8 billion. Slaughter and May is advising Walmart Inc.

The agreement secures the benefits for all of the Scheme’s approximately 12,300 members (4,800 pensioners and 7,500 deferred pensioners), as the Scheme is now fully hedged against longevity, interest rate and inflation risks.

As part of the £3.8bn buy-in, ASDA is making a one-off final pension contribution of approximately £0.8bn.

The buy-in has been secured in anticipation of a full ‘buy-out’ of the Scheme. This is expected to be completed in late 2020 or early 2021. It will be one of the largest full buy-outs ever undertaken in the UK.

On 31 December 2018, RL (A+ rated) had insured 770,000 pension scheme members and had £36 billion in assets under management.

Charles Cameron, partner and Head of Pensions at Slaughter and May, said:

“This transaction achieves a positive outcome for Walmart, Asda and the Trustee in securing members’ benefits. It is a privilege to have advised Walmart on what is one of the largest buy-out transactions in the UK to date.”

Craig Cleaver, corporate insurance partner at Slaughter and May, said:

“We are delighted to have acted for Walmart on one of the most significant buy-ins this year. The transaction provides a number of benefits to the Walmart group including more certainty around the impact of changes in life expectancies in relation to the Asda pension scheme and aims to reduce certain financial risks in respect of the Scheme.”​

Contacts

Pensions: Charles Cameron (partner), Hugh Gittins (senior counsel); Insurance: Craig Cleaver (partner); Tax: Emma Game (senior counsel); Corporate: Francesca Parker (associate), Valerie Kemp (associate); Financing: Charlie McGarel-Groves (associate), David Coates (associate) and Emma Kudzin (associate)


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