BT Pension Scheme completes two longevity swaps totalling £10bn

The BT Pension Scheme (BTPS), one of the UK’s largest private sector pension schemes with 260,000 members and £36bn (€43bn) of assets, completed two longevity reinsurance transactions.

The new longevity arrangements cover BTPS pensioner liabilities of £5bn with Swiss Re and increase existing cover with Reinsurance Group of America (RGA) by £5bn, following the transaction completed using a similar arrangement in 2023.

The reinsurance efficiently leverages the pension fund’s existing infrastructure which has been facilitated via BTPS’s existing ‘captive’ insurer.

BTPS has also previously entered into a £16bn longevity risk deal with Prudential Insurance Company of America in 2016.

The two new transactions further protect BTPS from the cost of unexpected increases in the life expectancy of its members and will have no impact on BT’s cash contributions to the pension fund.

The transactions were led by Brightwell, BTPS’s primary services provider, and supported by WTW and A&O Shearman, with Swiss Re being advised by Willkie Farr & Gallagher.

Jill Mackenzie, chair of trustees at BTPS, said: “These transactions help to advance the development of the scheme’s long-term investment strategy, providing increased certainty for the scheme, our sponsor, and members.”

Wyn Francis, chief investment officer at Brightwell, added that the transactions demonstrate the value in a fully integrated fiduciary manager.

Francis said the transactions will be onboarded to Brightwell’s automated, efficient and low-cost operating platform, where Brightwell will use its experience and capability to achieve “market-leading outcomes for a scheme in run-on”.

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