Cadbury Pension Fund

16th December 2009

In November 2009, PIC insured the benefits of Cadbury pensioners over the age of 65, in a £500million transaction.

Transaction highlights:

Size:

• Cadbury is the biggest UK company to have undertaken a pension insurance transaction to date
• The transaction covered 10,000 pensioners (out of a total of c.30,000 members) and was for approximately 25% of the fund's liabilities

Speed:

• Innovative, tailored proposal to provide a bulk annuity to meet trustee desire to transfer risk at the earliest opportunity
• Execution stages of the deal were completed ahead of schedule

Flexibility:

• Worked with Trustee sub-committee for a year to establish a close relationship in which we investigated a variety of pensioner buy-ins, including age groupings, differing membership profiles, retaining inflation risk and the definition of dependent benefits
• Also investigated additional security mechanisms and decided that the insurance regime was a sufficiently strong safety net and that additional security was not a necessary requirement to undertaking a large pensioner buy-in

"We have been working with the Trustees for over a year in order to meet their requirements with the most appropriate transaction for the Fund. We are very pleased to have been able to help the Trustees achieve this important step in securing pensioner benefits."

John Coomber, Chief Executive, Pension Insurance Corporation