The Barclays Bank UK Retirement Fund said the move would help reduce scheme risk
The trustee of the Barclays Bank UK Retirement Fund (UKRF) has insured £7bn of its liabilities against longevity risk, with reinsurance provided by an insurance subsidiary of Prudential Financial.
The scheme said the transaction helps protect the UKRF from the financial risk of any unexpected increase to life expectancy for current pensioners - adding that, in addition to the £5bn the UKRF transacted in 2020, this results in over three-quarters of current pensioners' longevity risk now being hedged.
It said the deal continues the trustee's journey to make the UKRF more secure for the benefit of all members by reducing risk - adding that, as before, members will see no changes to their benefits, which will continue to be paid directly by the UKRF trustee.
Chair of the trustee Peter Goshawk said: "This second longevity transaction is an important part of our continued de-risking of the UKRF and improves benefit security for all members. The success of the transaction is down to the collaboration and support of Barclays and the hard work of Barclays' pension team, Prudential Financial and our advisers, all of whom I would like to thank."
Prudential Financial head of international reinsurance for retirement strategies Rohit Mathur said: "We are pleased to partner with the trustee of the Barclays Bank UK Retirement Fund on a longevity transaction that helps to meet the client's risk management objectives. It demonstrates Prudential Financial's continued leadership and commitment to the global pension and longevity risk transfer market."
Aon risk settlement partner Tom Scott added: "This transaction is a further substantive step in the trustee's journey to improve the resilience and security of UKRF members' benefits. Working closely with Kate McInerney's legal team at Allen & Overy, our multi-disciplinary team was able to conclude a successful negotiation for the UKRF. We leveraged the heightened capacity and appetite of the global reinsurance market during the broking process, as well as the UKRF's existing operational infrastructure and longevity transaction experience."
Aon was the lead adviser to the UKRF on the transaction, Allen & Overy provided legal counsel. Willkie Farr & Gallagher served as legal counsel to Prudential Financial on the transaction.
Insight Investment was appointed as the collateral manager for the transaction.
