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Carillion Acts to Protect Against Longer Living Pensioners

12 December 2013 | Updated 01 January 1970
 

Carillion plc (Carillion) and Carillion (DB) Pension Trustee Ltd (the ‘Trustee’) has announce that a longevity swap has been agreed between Deutsche Bank AG and five defined benefit pension schemes sponsored by Carillion.

The longevity swap will hedge against the risk of rising costs as a result of current pensioners in the schemes living longer than expected. The swap is one of a range of exercises undertaken as part of Carillion’s long-term strategy to reduce pension risk, enhance the security of members’ benefits and increase certainty over future costs.

The swap covers around 9,000 pensioners with a liability of around £1bn and has no immediate cash impact on the company. Commenting on the swap, Richard Adam, Carillion Group Finance Director, said: “The Trustee has secured this deal to remove a significant amount of risk at an attractive price.”

Robin Ellison, Chairman of Carillion (DB) Pension Trustees Ltd said: “Pension scheme liabilities have risen significantly in recent years due to increasing life expectancy. By completing this transaction with Deutsche Bank AG, the Trustee has hedged this risk for the members covered by the swap thereby helping to improve the security of benefits for all members.”

Picture courtesy of www.moneymarketing.co.uk

Article written by Brian Shillibeer | Published 12 December 2013

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