British Airways’ Airways Pension Scheme has reached a long life swap transaction with Metropolitan Tower Life Insurance coverage Firm, a subsidiary of MetLife, and Zurich Assurance (Zurich UK).
The Airways Pension Scheme is a company outlined profit pension scheme for British Airways members.
This deal goals to switch the longevity danger related to £340m of the scheme’s liabilities, providing enhanced safety for its members.
The longevity insurance coverage coverage is an association between the scheme’s Trustees and Zurich UK, with a corresponding reinsurance association between Zurich UK and MetLife with Zurich UK’s pass-through resolution.
This pass-through resolution permits MetLife to imagine the longevity danger for roughly 1,100 scheme members, sharing mutual credit score danger publicity with the trustees.
The transaction is designed to be a part of the scheme’s funding portfolio, offering revenue in eventualities the place members outlive present life expectancy projections.
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WTW served because the lead adviser for the trustees of the Airways Pension Scheme throughout the transaction.
The trustees acquired authorized steering from Sackers and Kramer Levin, whereas MetLife and Zurich UK had been suggested by Eversheds Sutherland and Slaughter & Might, respectively.
Zurich UK Longevity Threat Switch head Greg Wenzerul mentioned: “We consider that the standardisation obtainable by means of use of the Zurich platform, which has now been used with the overwhelming majority of longevity reinsurers, gives a possibility for smaller schemes to transact in an environment friendly and more and more standardised method.”
WTW trustees lead adviser Shelly Beard mentioned: “That is the second longevity swap introduced in 2024 masking lower than £1bn of liabilities, and the fifth in recent times to incorporate non-pensioners, which works to point out that hedging longevity danger on this manner is an choice obtainable to schemes of all sizes and shapes.”
