BT Pension Scheme Secures Major Longevity Reinsurance Agreements
The BT Pension Scheme (BTPS), a leading private sector pension plan in the United Kingdom with a member base of 260,000 and assets worth £36 billion under management, has successfully finalized two substantial longevity reinsurance transactions valued at £10 billion.
The latest longevity re/insurance arrangement encompasses a £5 billion agreement with Swiss Re and an expansion of existing arrangements with Reinsurance Group of America (RGA) by an additional £5 billion, building on a similar transaction from the previous year.
Executed through the Scheme’s captive insurer, this reinsurance strategy capitalizes on pre-existing infrastructure while ensuring that BT’s cash contributions remain unaffected, according to the official announcement.
Jill Mackenzie, Chair of Trustees at BTPS, remarked, “These transactions significantly advance the Scheme’s long-term investment strategy, offering greater certainty for the Scheme, our sponsor, and our members.”
Brightwell, the primary service provider for BTPS, spearheaded these transactions with support from WTW and A&O Shearman. Swiss Re received advisory services from Willkie Farr & Gallagher.
Wyn Francis, Chief Investment Officer at Brightwell, stated, “The successful execution of two simultaneous longevity swaps by Brightwell underscores the value of a fully integrated fiduciary manager. These transactions will be integrated into Brightwell’s automated, efficient, and cost-effective operating platform, further enhancing our expertise in managing all Scheme risks to deliver superior outcomes for a Scheme in run-on.”
Emma Ferris, Managing Director at RGA UK, added, “We are thrilled to have partnered with BTPS once again in this transaction, reinforcing the Scheme’s objectives of ensuring stability and financial security for its members’ retirement benefits.”
Kerry McMullan, Head of L&H Structured Solutions at Swiss Re, commented, “We appreciate the opportunity to contribute our financial strength and longevity risk structuring expertise to make the BTPS more resilient to unpredictable future life expectancies, thereby aiding in the provision of secure retirement benefits to its membership.”
