Heineken's Scottish and Newcastle Pension Plan has completed a £2.4bn longevity swap with Friends Life.
The deal, which is the first such transaction for Friends Life or its parent company Aviva, covers all of the scheme's approximately 19,000 pensioner members.
Towers Watson, which advised the scheme and its sponsor, said it had identified untapped capacity in the insurance market after an extensive selection process.
An undisclosed portion of the longevity risk will be passed on to Reinsurer Swiss Re, while Aviva will hold on to some of it.
Heineken UK head of pensions Neil Parfrey (pictured) said: "By hedging against longevity, we have reduced a significant amount of the Plan's risk should the overall life expectancy of members exceed our projections."
The deal will see the scheme pay the insurer a fixed schedule of premiums based on the best estimate of future cash flows plus a fee. The insurer will make payments to the scheme based on its actual mortality experience and payouts.
Towers Watson head of pension transactions Ian Aley said the scheme had looked at a range of options - including the captive insurer model used by the Merchant Navy Office Pension Fund - before opting for a traditional structure with a new counterparty.
He said: "This transaction is a further example of how innovation and excellent market relationships can lead to significant cost efficiencies. Heineken has broken new ground with this transaction, identifying a new longevity counterparty in Aviva, who provided additional market capacity on this occasion."
Aviva's managing director for heritage David Still said the transaction demonstrated the insurer's commitment to working with corporate clients to manage pension scheme risks.
He said: "Leveraging the strong partnership we forged with the trustees and with Swiss Re, our reinsurance partner on this transaction, we are delighted to have been selected as the insurer for a transaction of this scale, which provides greater certainty for the Scottish & Newcastle Pension Plan in relation to its longevity risk."
Linklaters acted as the legal adviser to Friends Life, while Travers Smith acted as legal adviser to the scheme and sponsor.
Although this is the first transaction completed by an Aviva company with an external scheme, it has previously used a group company to pass £5bn of longevity risk in its own scheme to the reinsurance market.
The number of defined benefit (DB) scheme members with benefits protected by an insurer will double by the middle of the decade, according to Lane Clark & Peacock (LCP).
Aviva Life & Pensions has concluded an £875m buy-in with its own staff pension scheme, following on from a similar transaction last year.
Nearly every trustee is confident of the next stage in their scheme’s strategy, despite almost an equal number being forced to consider replacing plans within the prior 12 months, according to research by Barnett Waddingham.
Companies could be overstating their pension liabilities by up to £60bn due to their life expectancy assumptions, according to XPS Pensions Group.
Just Group has completed a £74m pensioner buy-in with the UK pension scheme of a US-listed engineering business.