The BBC Pension Scheme has completed a £6bn longevity swap deal with Zurich Assurance and global reinsurer Metropolitan Life Insurance Company (MetLife) covering around 21,000 members.

The transaction, which builds on a previous £3bn longevity swap with Zurich in 2020, is intended to provide the BBC Pension Scheme, and the BBC as sponsor, with further protection against the risk of rising costs due to members living longer than currently expected. 

Combined, the scheme’s longevity transactions hedge the risk associated with nearly all of the scheme’s pensioner and dependant liabilities. 

However, the trustee retains future flexibility, control and security, while minimising cost, governance and operational burden through Zurich’s solution. 

Aon acted as sole transaction adviser, including negotiating the intermediation terms with Zurich and broking the reinsurance with MetLife, while legal advice was provided to the trustee by A&O Shearman, to Zurich by Slaughter and May and to MetLife by Eversheds Sutherland and Debevoise & Plimpton.

Commenting on the deal, BBC Pension Scheme trustee board chair, Catherine Claydon, said: “The trustee is pleased to have further mitigated the scheme’s exposure to longevity risk, through a second transaction on highly attractive terms for the scheme. Many thanks to our advisers, Zurich and MetLife, for achieving this important milestone."

Aon risk settlement partner, Tom Scott, also highlighted the deal as further evidence of the "vibrant" longevity insurance and reinsurance markets that continue to offer attractively priced and structured solutions in various forms to UK pension schemes.

This was echoed by MetLife head of UK reinsurance, Angela Li, who said: “MetLife is proud to support the BBC Pension Scheme in this important step of its de-risking journey.

"This transaction underscores our dedication to the UK market and our ability to partner on complex, large-scale longevity swaps, providing tailored solutions that meet the evolving needs of pension schemes and the broader retirement market.”

Adding to this, Zurich head of longevity risk transfer, Greg Wenzerul, said: “We’re privileged to have partnered with the scheme trustee and their advisers on this important phase of their de-risking strategy. 

"Supporting our clients through each step of their journey-planning in this manner reflects our commitment to putting customers first, an ethos Zurich applies across its broad customer base.

"Zurich UK’s status as a UK-regulated life insurer provides the trustee with the highest bar of governance assurance, reinforcing confidence in long-term best practice.”

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