RGA Strikes $6.4Bn Longevity Swap With BT Pension Scheme

Reinsurance Group of America (RGA) has struck a u00a35bn ($6.4bn) longevity swap with the UK-based BT Pension Scheme (BTPS).

BTPS is one of the UKu2019s largest pension funds, with 270,000 members and nearly u00a350bn of assets under management. The deal with RGA is a combination of longevity insurance, with a reinsurance component, and is the second such transaction the scheme has completed.

In 2014 the scheme agreed a u00a316bn longevity swap with the Prudential Insurance Company of America, which at the time was three times bigger than any previous similar transaction.

In a press release announcing the move, BTPS said that the latest deal with RGA was built on insurance infrastructure which had been created for the previous longevity swap.

The transaction was led by Brightwell and WTW. Allen & Overy provided legal advice to BTPS while RGA was advised by Eversheds Sutherland.

The UK pension risk transfer market has been dominated by buy-ins and buy-outs so far in 2023, but BTPS is not the first scheme to target purely longevity risk.

In May, Zurich and Pacific Life Re teamed-up to provide a u00a31.6bn longevity swap for UK lender Yorkshire and Clydesdale Banku2019s pension fund.