BTPS completes two longevity reinsurance deals

The BT Pension Scheme, a large UK private sector pension scheme with around 260,000 members and £36 billion of assets under management, has recently completed two longevity reinsurance transactions. 

According to the scheme’s managers 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 £5 billion with Swiss Re and increases existing cover with Reinsurance Group of America by £5 billion, following the transaction completed using a similar arrangement in 2023. The reinsurance efficiently 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.

Jill Mackenzie, chair of trustees, BTPS 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.”

Wyn Francis, chief investment officer, Brightwell, said: “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.”

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