Axa UK Group Pension Scheme has closed a longevity swap for its defined benefit (DB) pension scheme with Reinsurance Group of America.
The longevity swap transaction covers £2.8 billion of pension liabilities and provides long term protection against costs resulting from pensioners living longer than initially expected, hence enhancing security for scheme members.
The deal covers around half of the pension scheme’s liabilities.
Axa UK was advised by Towers Watson and law firm Linklaters.
Stephen Yandle, chairman of Axa UK Pension Trustees, said: “By significantly de-risking the scheme, this will benefit all our DB scheme members and will not affect any payments to members as they will continue to receive their pension as normal.
“This is a very positive step in providing additional security of members’ pensions.”