The £1 billion UK Service provider Navy Rankings Pension Fund has secured a long life swap association to cowl liabilities amounting to £450 million, with the help of dealer WTW and reinsurance capability from MetLife.
That is the primary pure longevity swap transaction we’ve seen to date in 2024.
There have been loads of pension buy-out and buy-in transactions, in addition to some that convert from longevity swap to a complete pension danger switch, however longevity swaps have been absent from the market, a minimum of from our vantage level this yr.
This longevity swap has been transacted by way of a Guernsey captive insurer owned by the pension fund’s trustee, that has fronted the pension for the longevity swap switch, whereas then getting into into a long life reinsurance settlement with MetLife, which absorbs the complete danger from the deal.
As with all longevity swap and danger switch offers, the objective is to switch the legal responsibility related to sure pensioners and dependents residing longer than anticipated, with solely the longevity danger transacted and no pension property altering palms.
Melanie Cusack, Trustee on the Service provider Navy Rankings Pension Fund (MNRPF), commented, “I’m delighted that the Trustee has taken an necessary step to make sure that our members’ advantages are strongly secured towards will increase in life expectancy. It is a continuation of our de-risking journey, and we’re happy to have accomplished the cope with engaging economics. It is a optimistic step in offering each extra safety for members’ pensions and certainty for employers.”
Jay Wang, Head of Threat Options at MetLife, the reinsurance capability supplier, added, “MetLife’s lengthy historical past and experience in danger administration positions us effectively to supply better certainty for MNRPF in relation to its longevity danger. We’re happy to have been chosen for the reinsurance of this transaction, This transaction demonstrates MetLife’s dedication to supporting options which assist pension schemes and insurers handle longevity danger.”
Shelly Beard, Managing Director at WTW, the lead adviser to the Trustee for this deal, additionally mentioned, “This transaction demonstrates that longevity swaps are an possibility for smaller tranches of liabilities. We labored with the Trustee to attain a aggressive reinsurer choice course of and engaging economics relative to the Fund’s reserves. It was a pleasure to work with MetLife to agree a transaction that met their, and the Trustee’s, targets, and to make sure that the Trustee’s future flexibility is maximised.”
View particulars of many longevity swaps and longevity reinsurance deals in our longevity risk transfer deal directory.
