UK - Premier Foods is the latest company to be linked with a big-money longevity swap deal as it seeks to offload £2bn (US$3.1bn) of longevity risk from its Rank Hovis McDougall pension scheme.
According to reports, trustees at the company - responsible for brands such as Branston Pickle and Mr Kipling - are close to signing a contract with an unnamed reinsurer.
Premier Food's defined benefit scheme deficit has ballooned in the past year, with the gross deficit increasing from £11.5m in 2008 to £300.6m in June, last year.
Some £189.5m of the 2009 deficit relates to Premier schemes, with the remaining £111.1m shortfall in the RHM schemes.
A company spokesman refused to confirm details of the contract, although he was keen to stress that such a deal wouldn't affect pensioners.
However, he admitted the scheme's trustees "can't ignore" the developing market for longevity transactions.
"I can't confirm the details as to where Premier is, but I can confirm that they are looking at this as part of good governance," he added.
The market for longevity swaps could reach £20bn this year as schemes search for ways to remove risk from the company balance sheet. (Global Pensions; January 28, 2010)
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