Pacific Life Re has completed a longevity swap transaction with the Trustee of the Prudential Staff Pension Scheme.
The longevity swap covers pension liabilities of £3.7 billion relating to over 20,000 pensioners in the scheme and was structured using a Guernsey-based captive.
Willis Towers Watson led the advice for the Trustee with external legal counsel for Pacific Life Re provided by CMS.
It’s hoped the swap will protect the scheme from the financial risk of an unexpected increase in life expectancy and make the scheme more secure to the benefit of all its members.
Elaine Murphy, Longevity Director, Pacific Life Re , commented: “We are delighted to have worked with the Trustee of the Prudential Staff Pension Scheme and Willis Towers Watson on this transaction. It’s a huge achievement to see a deal of this size being completed despite the challenges of the COVID-19 pandemic.
“This transaction demonstrates the continuing strength and capacity of the reinsurance sector to support pension scheme de-risking in a time of increased uncertainty with regards to future life expectancy.”
Ian Aley, Head of Transactions, Willis Towers Watson , added, “This transaction follows a period of working with the Trustee to identify the optimal solution. Within a vibrant market and following a very competitive process including many bidding reinsurers, Pacific Life Re was selected.
“We were pleased to be able to build on the Trustees in- depth understanding of this type of transaction to help them achieve attractive terms that reduce risk and enhance member security.
“The transaction demonstrates both the appetite of defined benefit schemes to de-risk their liabilities and how transactions can be successfully structured within the current environment.”