BT Pension Scheme Completes £5 Billion Longevity Swap
Posted on 08/01/2023
The BT Pension Scheme is one of the UK’s largest private sector pension schemes with over a quarter million members and £47 billion in assets. BT Pension had entered into a longevity reinsurance arrangement with Reinsurance Group of America, Incorporated (RGA). The transaction protects BT Pension from the cost of unexpected increases in the life expectancy of its members.
Otto Thoresen, Chair of Trustees, BT Pension said: “Longevity risk is one of the biggest risks facing the Scheme. This transaction helps provide greater certainty for the Scheme, our sponsor and members.”
Emma Ferris, Senior Vice President, Global Financial Solutions, RGA UK, said: “We are delighted to have partnered with BTPS to help reduce the longevity risk in the Scheme, using our financial security and longevity expertise to enable the Scheme to focus on its core mission of providing stable and sustainable retirement benefits.”
The new longevity insurance and reinsurance arrangement covers £5 billion of BT Pension liabilities and follows the £16 billion of liabilities covered by a similar arrangement entered into by BT Pension in 2014. The transaction will have no impact on BT’s cash contributions to the Scheme, nor on the 2023 triennial valuation.
Advisors
The transaction was led by Brightwell, BTPS’ primary service provider, together with WTW and Allen & Overy, with RGA being advised by Eversheds Sutherland.
