- Pest control company Rentokil Initial said it had agreed to transfer its £1.5bn pension scheme to Pension Insurance Corporation ahead of a planned full buy-out of the scheme in 2020.

The so-called buy-in deal with Pension Insurance provided certainty and security for the scheme's 14,200 members, the company said.

It also meant the scheme was fully hedged against longevity, interest rate and inflation risks.

The planned buy-out in 2020 would completely extinguish all future pension liabilities from Rentokil's balance sheet. It was also anticipated to generate a small cash surplus, which Rentokil said would be returned to the company.

As at 31 December, an accounting surplus, which was £373.2m at 30 June, would be written down to the estimated cash surplus.

Rentokil's defined contribution scheme, managed by Fidelity, was unaffected.

'This transaction is a fantastic outcome for our pensioners, the company and our shareholders,' chief executive Andy Ransom said.

'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.'

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