Fujitsu's ICL Group Pension Plan enters £3.7bn longevity hedge

The ICL Group Pension Plan has insured longevity risk in respect of £3.7bn of its liabilities, with Swiss Re providing the reinsurance coverage.

The hedge covers pensions in payment for approximately 9,000 members of the Fujitsu plan and provides long-term protection against additional costs resulting from pensioners or their dependants living longer than expected.

Willis Towers Watson (WTW) led the transaction as actuarial and transaction adviser to the trustee, with Gowling WLG LLP and Momentum Investment Solutions and Consulting providing legal and investment advice respectively.

Swiss Re received legal advice from Pinsent Masons LLP and Insight Investment is set to act as calculation agent, collateral manager and collateral valuation agent as well as providing longevity transaction reporting services.

ICL Group Pension Plan trustee chair, David Sillitoe, commented: “By hedging the longevity risk associated with our pensioners, we have significantly reduced the overall risk in the plan and improved security for all our members.

“Furthermore, attractive reinsurer pricing combined with an efficient approach to access the reinsurance market using a Guernsey based captive insurance company, has allowed us to remove this risk in a cost-effective manner.”

Insight Investment head of client solutions group, Serkan Bektas, said: “We are pleased to partner with the ICL Group Pension Plan as it takes the next step on its de-risking journey. This transaction has made broad use of Insight’s longevity platform, which we built specifically to facilitate the use of longevity swaps by pension schemes. Our aim is to pioneer flexible and efficient approaches to hedging longevity risk.”

WTW senior director, Matt Wiberg, added: “This transaction represents another exciting development in the longevity market, with the structuring of the swap through Insight Investment’s new intermediary platform.

“On behalf of the trustee, WTW is delighted to have successfully implemented the swap using this structure and to have led the price and commercial negotiations, resulting in the removal of a substantial element of risk at an attractive price.”

    Share Story:

Recent Stories

Making pension engagement enjoyable through technology
Laura Blows speaks to Nick Hall, business development director and Chartered Financial Planner at UK-based Wealth Wizards about the opportunities that technology provides for increasing people’s engagement with pensions and increasing their retirement wealth. Please click here for an edited write-up of the video

ESG & DC – creating the right tools
In the latest of our series of Pensions Age video interviews Francesca Fabrizi, Editor in Chief of Pensions Age is joined by Manuela Sperandeo, Head of Sustainable Indexing EMEA, BlackRock and Mark Guirey, Executive Director, Asset Owner and Consultant Coverage - MSCI to discuss some key trends of ESG investing among UK pension funds today. Please click here for an edited write-up of the video

Savings and finance at retirement
Laura Blows is joined by Claire Felgate, Head of Global Consultant Relations, UK, at BlackRock, to discuss savings and finance at retirement. Please click here for an edited write-up of the video

Global equities and transition investing
Pensions Age editor, Laura Blows speaks to Royal London Asset Management equity investment director, Jonathan Price, about transitioning to sustainable investments within global equities
Cost transparency
Pensions Age editor, Laura Blows, discusses investment cost transparency and savings with Aon’s Neil Smith and Chris Hawksworth. Please click here for an edited write-up of the video

Advertisement Advertisement Advertisement