A UK pension scheme sponsored by a Fortune 500 company has completed a £1bn (€1.15bn) longevity swap where PartnerRe acted as reinsurer. Zurich as insurer, acted as the intermediary to the swap.

The transaction covering pensioner and non-pensioner members insures the majority of the risk that members live longer than expected and is a key milestone towards the trustees’ plan to secure all benefits, it was announced.

This is among the first in an emerging trend of longevity swap transactions that has included non-pensioners, according to Hymans Robertson, the lead transaction adviser for the scheme and scheme actuary.

Legal advice provided by Gowling WLG, while Slaughter and May acted as legal advisers for Zurich.

Steve Southern of 20-20 Trustees, independent trustee to the scheme, said: “The trustees are delighted to have taken yet another step on the journey to secure benefits for our members without taking avoidable risks. We are delighted with the support received from Hymans Robertson and Gowling for this transaction and for the clarity of strategic advice leading up to this transaction.”

Iain Pearce, lead advisor at Hymans Robertson, added: “As demonstrated by this transaction, trustees are increasingly seeing longevity swaps as a valued and instrumental transaction to support ambitions to buyout, by accelerating the speed at which this risk can be addressed without restricting investment freedom over their journey plan. The trustee expects to transfer the longevity protection to an insurer as part of a future buy-in when it is affordable to do so.”

TT Group scheme in £400m buy-in deal with Legal & General

Separately, the TT Group (1993) Pension Scheme has agreed a buy-in deal with Legal & General worth approximately £400m, securing the benefits of some 5,000 pension fund members.

The scheme oversees the pension assets of TT Electronics plc, a global provider of design-led, advanced electronic technologies in aerospace and defence, healthcare and automation and electrification markets.

Schroders Solutions and Mercer advised the trustees on the transaction, it was announced.

Paul Felbeck, chair of the trustee board, said: “The scheme’s journey over many years from significant deficit to buy-in has been made possible with the financial support and collaboration of TT and its senior management, the invaluable services of the trustee’s advisers: financial, actuarial, legal and secretarial – who all deserve great credit for their professionalism, dedication and positive impact – along with the diligent hard work of my fellow trustee directors, past and present.”

Julian Hobday, director of Legal & General Retirement Institutional, added: “Our tailored price locks provide price certainty for trustees, particularly during the current period of high market volatility. We’re pleased to have been able to provide this certainty to the trustee on the latest stage of its de-risking journey. The success of this transaction is also further evidence of how important the member experience is for pension schemes looking to de-risk.”

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