UK - Boots has boosted the amount of inflation-linked assets in its £2.4bn pension scheme to 40% after a £150m deal with the Royal Bank of Scotland.
The move means Boots has further hedged its pensions scheme against the effects of future inflation.
It achieved the increase by making 18, 22 and 28-year swaps with RBS – one of the few banks with expertise in this area.
Boots pension scheme trustee investment committee member John Ralfe explained: “Under these swaps the scheme makes fixed payments to the bank from its fixed rate bond assets and in return receives amounts indexed in line with inflation.
“The inflation-linked amounts received increase by a minimum of 1.5% and a maximum of 5% in any year.”
In April, Boots increased the amount of index linked assets that it held in its pension scheme to 33% – in line with its policy of matching assets to liabilities.
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