On the go: The BBC Pension Scheme has completed a longevity swap with Zurich and Canada Life Reinsurance covering more than £3bn of pensioner liabilities.
The deal will provide the scheme and its sponsor protection against the risk of rising costs as a result of pensioner members and their dependants living longer than expected, a statement read.
Catherine Claydon, chair of the scheme trustee board, noted this is an important step in its risk management strategy, which will “significantly reduce one of the key risks that all pension schemes face, namely the uncertainty in relation to how long members will live and pensions will have to be paid for”.
Greg Wenzerul, Zurich’s head of longevity risk transfer, stressed the transaction is “an example of how large pension schemes can successfully hedge longevity risk in a cost‐effective and low-risk way”.
“We set out to lower the perceived barriers for pension schemes seeking longevity‐only derisking, and using a UK regulated insurer to structure the deal offers trustees a secure, simple and flexible solution,” he said.
