LONDON, November 23, 2010 /PRNewswire/ -- 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.

About Prudential:

"Prudential" is a trading name of The Prudential Assurance Company Limited, which is registered in England and Wales. This name is also used by other companies within the Prudential Group, which between them provide a range of financial products including annuities, life assurance, bonds, pension funds, a tax calculator and retirement plans.

Prudential offers customers pensions and annuities, pensions retirement income (http://www.pru.co.uk/pensions_annuities/our_annuities/), insurance and investment opportunities.

Note to Editors:

The Prudential / GSK agreement is a 'buy-in' of annuities ( http://www.pru.co.uk/pensions_annuities/pension_guide/near_retirement/) rather than a 'buy-out' of pension liabilities. A 'buy-in' is where a group annuity contract is bought as fund investments ( http://www.pru.co.uk/investments/) and held by the Trustees. It belongs to the pension fund, not individual members. The Trustees hold the policy as a fund asset to meet its liabilities, and receives income from it to pay pensioners.

In effect, the GSK Pension Scheme / Fund have chosen to invest in an annuity policy to hold alongside their other assets. Individual scheme members will not become Prudential policyholders as they would in a 'buy-out'. Instead, the Pensions ( http://www.pru.co.uk/pensions_annuities/prudential_pensions/) Scheme / Fund will receive payments from Prudential which match the money the Trustees pay out to pensioners.

PR Contact: Steve Colton PR Manager Prudential 3 Sheldon Square London W2 6PR +44(0)20-7150-3136 http://www.pru.co.uk

SOURCE: Prudential

CONTACT: PR Contact: Steve Colton, PR Manager, Prudential, 3 SheldonSquare, London, W2 6PR, +44(0)20-7150-3136