The BBC Pension Scheme has completed a longevity swap with Zurich Assurance and Metropolitan Life Insurance Company covering approximately £6bn (€6.8bn) of pensioner liabilities, representing around 21,000 members.
This is the second longevity swap that the Scheme has executed with Zurich, following a £3bn transaction in 2020.
The transaction will provide the BBC pension fund and the sponsor with further protection against the risk of rising costs due to members living longer than currently expected. Combined, the scheme’s longevity transactions hedge the risk associated with nearly all of the pension fund’s pensioner and dependant liabilities.
Under the terms of the transaction, the trustee retains future flexibility, control and security, while minimising cost, governance and operational burden through Zurich’s solution.
Aon acted as sole transaction adviser, including negotiating the intermediation terms with Zurich and brokering the reinsurance with MetLife.
Catherine Claydon, chair of the pension fund trustee board, said: “The trustee is pleased to have further mitigated the scheme’s exposure to longevity risk, through a second transaction on highly attractive terms for the scheme.”
Greg Wenzerul, Zurich’s head of longevity risk transfer, said: “We’re privileged to have partnered with the scheme trustee and their advisers on this important phase of their de-risking strategy. Supporting our clients through each step of their journey-planning in this manner reflects our commitment to putting customers first, an ethos Zurich applies across its broad customer base.”
Angela Li, MetLife’s head of UK reinsurance, said: “This transaction underscores our dedication to the UK market and our ability to partner on complex, large-scale longevity swaps, providing tailored solutions that meet the evolving needs of pension schemes and the broader retirement market.”
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