Plumbing giant Ferguson today announced it will pay specialist insurers £600m to offload its final salary pension scheme.
Pension Insurance Corporation (PIC) will take on the responsibility for all of Ferguson's retirement financial liabilities, listed as £1.7bn, through a so-called "pension buy-in". This means the scheme will continue to be administered by the current trustees with PIC ensuring payouts are made to pensioners.
Last week, Ferguson rewarded shareholders with a big hike in dividends after hailing the success of its repositioning as a US-focused firm.
David Illingworth, the chair of Ferguson's pension trustees, said the pension buy-in was the "logical next step".
Actuaries from Aon and lawyers from Freshfields advised the trustees.
PIC head of business development Mitul Magudia said: "As with last year, and reflecting continued low gilt yields, the majority of insurance transactions in 2017 have been pensioner buy-ins. The bulk annuity market, driven by high levels of demand and competitive pricing, is currently experiencing a period of significant activity."
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