Barclays closes 2nd longevity swap for U.K. pension fund for $8.6 billion

Barclays Bank U.K. Retirement Fund, Redhill, England, insured £7 billion ($8.6 billion) in liabilities through a longevity swap with an insurance subsidiary of Prudential Financial, according to a news release Thursday.

It is the second longevity swap for the fund, following one for £5 billion in December 2020 with Reinsurance Group of America. At that time, the plan's defined benefit assets were £34 billion.

The fund has now covered three-fourths of its longevity risk with the swaps, the release said. Peter Goshawk, chairman of the plan trustee, said in the release that the latest longevity transaction "is an important part of our continued de-risking of the UKRF and improves benefit security for all members."

Aon was lead adviser to UKRF on the transaction, and Allen & Overy provided legal counsel. Tom Scott, partner in Aon's risk settlement team, said in a separate statement that the transaction team "leveraged the heightened capacity and appetite of the global reinsurance market during the broking process."

Insight Investment was appointed the collateral manager for the longevity transaction and served a similar role for the 2020 transaction.

As of Sept. 30, PFI had more than $1.3 trillion in assets under management, according to the UKRF release.