BT Pension Scheme finalises two longevity swaps of £10bn

The BT Pension Scheme (BTPS), a private sector pension scheme in the UK, has completed two longevity reinsurance transactions totalling £10bn.

The move is aimed at shielding BTPS from the financial impact of increases in the life expectancy of its members, which currently number more than 260,000 with £36bn in assets under management.

The longevity insurance and reinsurance agreements secure £5bn in coverage for BTPS pensioner liabilities through Swiss Re, while also expanding the current £5bn protection with Reinsurance Group of America (RGA).

This follows a similar transaction completed in 2023 and utilises the scheme’s existing infrastructure including its 'captive' insurer.

The transactions will not affect BT's cash contributions to the scheme.

The operations were spearheaded by Brightwell, BTPS' primary services provider, with support from WTW and A&O Shearman.

Swiss Re received advisory services from Willkie Farr & Gallagher during the process.

BTPS chair of trustees Jill Mackenzie 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.”

Brightwell chief investment officer Wyn Francis stated: “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.”

RGA UK managing director Emma Ferris commented: “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.”

Swiss Re L&H Structured Solutions head Kerry McMullan added: “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.”

"BT Pension Scheme finalises two longevity swaps of £10bn " was originally created and published by Life Insurance International, a GlobalData owned brand.

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