Rentokil Initial has announced that it will transfer its £1.5 billion pension scheme to Pension Insurance Corporation. This is ahead of the planned full buy-out of the scheme in 2020.
The agreement will secure the benefits of 14,200 members (7,500 pensioners and 6,700 deferred pensioners). As a result, this means that the scheme is now fully hedged against longevity, interest rate and inflation risks.
Rentokil Initial is a FTSE 100 company and one of the largest business services companies across the globe.
It currently operates in over 70 countries. Moreover, it is a global leader in the Pest Control and Hygiene services.
Chief Executive of the company, Andy Ransom, commented:
“This transaction is a fantastic outcome for our pensioners, the Company and our shareholders. We have supported the Scheme over many decades and over that period made significant cash contributions to remedy a deficit that has existed between the Scheme’s assets and liabilities. That funding, combined with excellent stewardship by the Scheme’s trustees, and the high quality support of the advisers to the Company and the Trustee, has resulted in a very positive situation whereby the Scheme can now be transferred to an A+ rated insurance company, PIC. This action de-risks the Scheme for the benefit of members and the Company.”
“While many other companies will have to continue investing heavily into their pension schemes for years to come, we can focus our future investments on delivering profitable growth.”
Additionally, Chris Pearce, Chairman of Trustee, said:
“This is great news for members. After many years of support from Rentokil Initial and careful management with Aon (our Actuary) and Willis Towers Watson (our investment adviser) we can now secure our members’ benefits through Pension Insurance Corporation (PIC), a company which has strong financial credentials and a track record of excellent customer service. I want to thank our advisers, Aon, and our lawyers, Linklaters, for their help in arranging a strong agreement with PIC which will continue the excellent pensions our members enjoy.”
At the beginning of October, Rentokil Initial acquired Mitie’s pest control business for £40 million.
At 08:57 GMT today, shares in Rentokil Initial plc (LON:RTO) were trading at +1.07%.
