The BT Pension Scheme, one of the UK’s largest private sector pension schemes with around 260,000 members and some £36bn of assets under management, recently completed two longevity reinsurance transactions. These transactions further protect BTPS from the cost of unexpected increases in the life expectancy of its members.
The new longevity insurance and reinsurance arrangements cover BTPS pensioner liabilities of £5bn with Swiss Re and increases existing cover with Reinsurance Group of America by £5bn, following the transaction completed using a similar arrangement in 2023. The reinsurance leverages the scheme’s existing infrastructure which has been facilitated via the scheme’s existing captive insurer.
The transaction will have no impact on BT’s cash contributions to the scheme.
The transactions were led by Brightwell, BTPS’ primary services provider and supported by WTW and A&O Shearman with Swiss Re being advised by Willkie Farr & Gallagher.
“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,” said Jill Mackenzie, Chair of Trustees at BTPS.
“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,” said Wyn Francis, Chief Investment Officer at Brightwell.
“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,” said Emma Ferris, Managing Director, RGA UK.
“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,” added Kerry McMullan, Head L&H Structured Solutions at Swiss Re.