Pharmaceutical firm Bristol-Myers Squibb has sealed a $1.4 billion de-risking deal with the Prudential Insurance Company of America.
It is the third major deal backed by Prudential this year, and will involve the insurer providing a group annuity contract for approximately 8,000 pensioners. The transaction will be completed in December.
A statement from the US pharmaceutical company said its retirement plan was in a “strong financial position” and no additional contributions were required from the sponsor to secure the deal.
The statement said: “The transaction reduces risk in the plan and better manages the ongoing variations in cost associated with its maintenance, while entrusting current retirees and their beneficiaries’ pensions to a financial institution with expertise in the long-term management of retirement benefits.”
The Bristol-Myers Squibb transaction comes just a week after Prudential announced it would take on $3 billion of liabilities from Motorola Solutions’ defined benefit pension.
Prudential was also involved in the BT Pension Scheme’s record longevity insurance swap, announced in July. The BT pension insured £16 billion ($25.9 billion) of liabilities against improvements in longevity, transferring the risk to a specially-established insurance subsidiary before reinsuring with Prudential.
Related Content: BT Insures £16B in UK’s Largest De-Risking Deal & Moody’s: Expect Pension Risk Transfer Surge to Beat New Mortality Tables