BTPS agrees £5bn longevity swap with Reinsurance Group of America

Written by Adam Cadle

01/08/2023

Reinsurance Group of America (RGA) has agreed a £5bn longevity swap with the BT Pension Scheme (BTPS), protecting the scheme from the cost of unexpected increases in the life expectancy of its members.

The deal was led by Brightwell, together with WTW and Allen & Overy, while RGA was advised by Eversheds Sutherland.

It was facilitated through an insurance intermediary via the scheme’s existing ‘captive’ insurer, which helped to efficiently leverage the scheme’s existing infrastructure.

The longevity insurance and reinsurance arrangement covers £5bn of BTPS pensioner liabilities, building on the £16bn of liabilities previously covered by a similar arrangement in 2014.

RGA UK senior vice president, global financial solutions, Emma Ferris, said: “We are delighted to have partnered with BTPS to help reduce the longevity risk in the scheme, using our financial security and longevity expertise to enable the scheme to focus on its core mission of providing stable and sustainable retirement benefits.”

The transaction is not expected to have any impact on BT’s cash contributions to the scheme, nor on the 2023 triennial valuation.

There are no related documents to show at this time.

Portfolio optimisation in today’s challenging market environment

Adam Cadle speaks to Dr Laura Ryan, Head of Research at Ardea Investment Management, about the firm’s insurance asset allocation optimisation tool and the reasons for developing it

The role ETFs can play in the ESG journey for insurers

Justin Wheeler, Head of UK iShares Asset Owner Distribution at BlackRock, and Mark Guirey, Head of EMEA Insurance Segment and UK Asset Owner Client Coverage at MSCI, discuss the drivers behind growth in this area, market reactions to COVID-19, and the role of indexing