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Telecoms giant Cable & Wireless has become the latest firm to sell off its workplace retirement savings scheme to Prudential in a £1bn bulk annuity agreement.

The book covers approximately 5000 members with assets of more than £1bn.

Under the terms of the agreement, the Cable & Wireless Superannuation Fund will purchase a bulk annuity policy from Prudential which will take on responsibility for the benefits payable by the trustee to the pensioners.

Cable & Wireless will continue to administer the fund and the terms of the pension payments made to its defined benefit scheme members will remain unchanged.

Nick Prettejohn, chief executive, Prudential UK and Europe, said: "This agreement is the largest of its kind in the UK this year and 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, particularly in volatile and uncertain market conditions. We believe that members of the CWSF will benefit from our considerable experience in the pensions and annuities markets."

The agreement is a buy-in of annuities rather than a buy-out of pension liabilities, which means the pension fund has chosen to invest in an annuity policy to hold alongside its other assets. Individual scheme members will not become Prudential policyholders as they would in a buy-out.

Tony Rice, Cable & Wireless group finance director, said: "The buy-in materially reduces the fund's and shareholders' exposure to the future risk of adverse changes in actuarial assumptions and investment returns."

Lane Clark & Peacock, actuarial consults, advised Cable & Wireless on the contract said that individual members will not see any changes to their benefits, but the risks associated with paying benefits to current pensioners will be borne by the Prudential rather than the CWSF.

Clive Wellsteed, partner at Lane Clarke & Peacock, said: "It broadly halves the size of Cable & Wireless' exposure to pension scheme liabilities. This improves security for members and is economically attractive for shareholders.

"The deal is the largest ever and follows a string of such transactions. It is a big vote of confidence in the market for passing pension risk to insurance companies. Earlier this year we predicted £10bn of deals would close in 2008 - the market is well on track for this."