BTPS completes £10bn longevity reinsurance

The 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.”