Prudential UK Enters Into Buy-In Agreement with GlaxoSmithKline
Prudential UK enters into GBP900 million bulk annuity buy-in agreement with GlaxoSmithKline.

LONDON, ENGLAND, November 25, 2010 /24-7PressRelease/ -- Prudential UK has entered into two bulk annuity buy-in contracts with the Trustees of the GlaxoSmithKline ("GSK") Pension Scheme and the GSK Pension Fund for a tranche of pensioner members within their defined benefit pension schemes. The transactions cover around 15 per cent of GSK's UK defined benefit pensioner liabilities and have an aggregate value of approximately GBP900 million.

Under the terms of the agreement, GSK has purchased bulk annuity policies from Prudential which will take on responsibility for a portion of the pensioner benefits payable by the Trustees of the GSK Pension Scheme and Pension Fund. GSK will continue to administer the Scheme and Fund and the terms of the pension payments made to its scheme members will remain unchanged.

Andrew Crossley, deputy chief executive, Prudential UK & Europe, said: "Prudential has a unique set of capabilities in the annuities market including extensive longevity experience, a superior investment track record and operational scale. Our strategy for bulk annuities is to participate selectively in the market and only enter into transactions which meet our strict requirements for return on capital. This agreement demonstrates our ability to complete complex and innovative transactions within the bulk annuity marketplace.

"Our financial strength and strong track record continue to be significant factors for pension scheme trustees looking for a safe and secure home for their pensions. We believe that the GSK Pension Scheme and Pension Fund will benefit from our expertise and experience in the pensions and annuities markets."

This contract will be recorded for accounting purposes within Prudential's fourth quarter results for 2010.

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