Tthe Barclays Bank UK Retirement Fund (UKRF) has closed a longevity risk deal worth £7bn (€8.1bn) with reinsurance provided by an insurance subsidiary of Prudential Financial.

This is the scheme’s second multi-billion-pound longevity transaction, following the £5bn transaction executed with the Reinsurance Group of America (RGA) in December 2020.

Peter Goshawk, chair of the scheme’s trustees, said: “This second longevity transaction is an important part of our continued de-risking of the UKRF and improves benefit security for all members. The success of the transaction is down to the collaboration and support of Barclays and the hard work of Barclays’ pension team, Prudential Financial and our advisers, all of whom I would like to thank.”

Rohit Mathur, head of international reinsurance for retirement strategies at Prudential Financial, said the deal demonstrates Prudential Financial’s “continued leadership and commitment to the global pension and longevity risk transfer market”.

Aon was the lead adviser to the pension fund, while Insight Investment has been appointed as collateral manager for the transaction – the asset manager had also been part of the £5bn transaction in 2020.

Tom Scott, partner in Aon’s risk settlement team, said: “This transaction is a further substantive step in the trustee’s journey to improve the resilience and security of UKRF members’ benefits.”

Serkan Bektas, head of the client solutions group at Insight Investment, said: “We are pleased to be partnering again with the trustee of the Barclays Bank UK Retirement Fund as it continues its de-risking journey.”

He noted that over the last 10 to 15 years, UK pension fund trustees have acted to substantially hedge interest rate risk and inflation risk and are now increasingly focused on longevity risk.

”The robust and efficient management of collateral and associated liquidity has received particular attention in recent months. Our approach is to work closely with clients who are seeking to maximise certainty of outcome and achieve greater overall investment efficiency in their risk management frameworks,” he added.

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