Nationwide Pension Fund completes £1.7bn longevity swap

Written by Adam Cadle

21/06/2023

Nationwide Pension Fund has completed a £1.7bn longevity risk transfer transaction with Zurich Assurance and Prudential Financial Inc (PFI), covering the longevity risk for around 7,000 in-pay members in the UK.

As part of the deal, which closed in May, the longevity risk of the pension scheme relating to these members will be passed through Zurich UK, to an insurance subsidiary of PFI as the reinsurer, with a limited recourse mechanism protecting Zurich UK against exposure under the transaction.

Aon was the lead adviser to the Nationwide trustee, with Insight Investment also appointed to provide ongoing longevity-related services in support of the trustee, while legal advice was provided by Sackers.

PFI, meanwhile, was advised by Willkie Farr & Gallagher LLP, while Zurich was advised by Slaughter and May.

Zurich UK head of longevity risk transfer, Greg Wenzerul, pointed to the deal as representation of a simple approach for pension fund trustees to manage their exposure to longevity risk.

"In a rapidly changing pensions de-risking market, with increased pension scheme focus on leverage, longevity swaps continue to represent a sophisticated and valuable de-risking approach," he said.

“We are pleased to count the trustee of the Nationwide Pension Fund as a customer, and to build on our existing transactions involving PFI.”

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