On the go: The circa £21.4bn Lloyds Bank Pension Scheme No.1 has entered into a £5.5bn longevity insurance and reinsurance arrangement with Scottish Widows and SCOR.
The scheme entered into the agreement to further protect itself from the cost of unexpected increases in the life expectancy of its members, it said.
The deal follows a similar arrangement that covered £10bn of liabilities for both Lloyds Bank Pension Scheme No.1 and the circa £9.5bn Lloyds Bank Pension Scheme No.2 secured in 2020.
This protection is structured as an insurance with Scottish Widows as the insurer and corresponding reinsurance with SCOR as the reinsurer. This structure means that the scheme’s longevity risk is passed to the latter, a statement read.
Vicky Paramour, trustee director and chair of the investment and funding committee at Lloyds Bank Pension Scheme, noted that the transaction “will reduce the scheme’s exposure to longevity risk and make the scheme more secure to the benefit of all members”.
She added: “The selection of Scottish Widows and SCOR followed a fair, robust and transparent review of the longevity insurance and reinsurance options available across the market, and their respective propositions delivered the best combination of benefits to meet our brief.”
Willis Towers Watson and Allen & Overy advised the trustees on the transaction.
This article originally appeared on MandateWire.com
