Slaughter and May advised Royal Philips NV (Philips) on the de-risking of the Philips UK Pension Fund by way of a circa £2.4 billion transaction with Pension Insurance Corporation PLC (PIC). The transaction, which was announced on 5 November 2015, involved the Trustees of the Philips UK Pension Fund (the Trustees) entering into a bulk annuity policy with PIC that will transfer to PIC responsibility for payment of retirement benefits owed to approximately 26,000 current and former UK employees and their beneficiaries. The transaction results in the transfer of £2.4 billion of the Philips UK Pension Fund’s defined benefit obligations to PIC and is expected to give rise to the largest full pension buy-out in the UK.
The transaction dovetails with existing buy-in policies purchased by the Trustees from other insurers in 2013 and 2014 in order to facilitate the settlement of all Philips’ obligations in respect of the Philips UK Pension Fund.
Herbert Smith Freehills LLP acted for PIC and Wragge Lawrence Graham LLP acted for the Trustees.