Marvin OnumonuThe BT Pension Scheme (BTPS) has completed two longevity reinsurance transactions valued at £10bn.
These transactions aim to shield the scheme from costs associated with unexpected increases in member life expectancy.
The reinsurance arrangements cover £5bn in pensioner liabilities with Swiss Re and increase existing coverage with Reinsurance Group of America by another £5bn.
The reinsurance also leverages the scheme’s existing infrastructure through its ‘captive’ insurer and doesn’t affect BT’s cash contributions to the scheme.
The transactions were overseen by Brightwell, with support from WTW and A&O Shearman, while Swiss Re was advised by Willkie Farr & Gallagher.
Jill Mackenzie, chair of trustees at BTPS, said: “These transactions help to advance the development of the scheme’s long-term investment strategy, providing increased certainty for the scheme, our sponsor, and members.”
Wyn Francis, chief investment officer at Brightwell, said: “Brightwell’s leading role in delivering two concurrent longevity swaps demonstrates the value in a fully integrated fiduciary manager.
“These transactions will be onboarded to Brightwell’s automated, efficient and low-cost operating platform, reinforcing our experience and capability in managing all scheme risks to achieve market leading outcomes for a scheme in run-on.”
Emma Ferris, managing director at RGA UK, said: “We are delighted to have once again partnered with BTPS on this transaction, further supporting the scheme’s aims of stability and financial security of retirement benefits for its members.”
Kerry McMullan, head of L&H structured solutions at Swiss Re, said: “We are very grateful for the opportunity to bring our financial strength and longevity risk structuring experience to BTPS to make the scheme more resilient to uncertain future life expectancies and helping it provide secure retirement benefits to its membership.”
