The Somerfield Pension Scheme has appointed BNY Mellon to provide custodial services for the £800m (€963.5m) scheme.

The appointment of BNY Mellon follows similar contracts with the other schemes of Somerfield’s parent, the Co-Operative Group.

BNY Mellon currently services the £7.4bn Co-Operative Group Pension Scheme and the £625m Britannia Pension Scheme.

Mike Thorpe, pension finance and risk controller at the Co-Operative, said the success of the existing relationship and BNY Mellon’s strength as a financial institution were key to the appointment.

In other news, consultancy Aon Hewitt has suggested the capacity for longevity swaps over the next two years could reach £100bn.

It said it based its prediction on availability in the reinsurance market, which is showing signs of maturity after 2013 proved a bumper year for deals.

A total of £8.9bn in longevity swaps were completed last year, Aon Hewitt said, with 15-20 providers now operating in the space, compared with only six when the market began in 2009.

Matt Willmington, a partner at the consultancy, said capital markets could also offer funding capacity along side the reinsurance industry.

However, he said it would be several years for this to materialise due to differing objectives among investors and pension schemes, and their lack of competitive edge over reinsurers.

Lastly, an undisclosed pension scheme has transacted a £33m medically underwritten pensioner buy-in with Partnership Assurance.

The members of the pension scheme belong to the building and civil engineering industry, leading the scheme to consider the underwritten buy-in as most appropriate.

The deal is the largest single underwritten buy-in to date and covers the majority of the scheme’s pensioner liabilities.

Andrew Cheeseman of PAN Trustees, who chairs the board, said the medical questionnaire sent to members was well received.

The deal also proved significant in allowing the scheme to de-risk while providing security for members, he said.

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