The National Grid Electricity Group of the Electricity Supply Pension Scheme, London, completed a £2 billion ($2.7 billion) longevity swap with Zurich Assurance.
The deal covers 100% of retiree liabilities, said Andrew Ward, partner and head of risk transfer at Mercer, which advised National Grid on the transaction.
The pension fund has about £3 billion in assets, said a spokeswoman for National Grid.
The National Grid Electricity Group is one of 23 actuarially and legally separate groups within the Electricity Supply Pension Scheme. The sponsor is National Grid Electricity Transmission PLC, part of National Grid PLC.
Aon acted as lead transaction adviser.
In 2016, Manweb Group of the Electricity Supply Pension Scheme completed a £1 billion longevity swap with Abbey Life Assurance Co.
"The group trustee is pleased to have been able to significantly reduce one of the key risks that any pension scheme faces, namely the uncertainty on how long members will actually live in practice," said Jon Carlton, chairman of the group trustee, in a news release from Zurich. "The policy will provide increased certainty on the cost of providing current benefits, which will therefore reduce the funding risks faced by the group trustee and National Grid in the future."
