Lloyds Banking Group Pensions Trustees Ltd., London, has entered into two longevity insurance and reinsurance arrangements worth a total £5.1 billion ($6.6 billion), according to a news release.
These longevity insurance and reinsurance arrangements cover £2.1 billion and £3 billion of retiree liabilities in the Lloyds Bank Pension Scheme No. 2 Scheme and the HBOS Final Salary Pension Scheme, respectively.
Both transactions are structured as insurance policies with Rothesay Life as the insurer, with reinsurance provided by Pacific Life Re International and an insurance subsidiary of the U.S.-based Prudential Financial Inc., the name of which was not provided. Lloyds could not be immediately reached for more information.
These latest transactions follow previous insurance and reinsurance arrangements into which the trustees entered in 2020 (which covered £10 billion of liabilities) and 2022 (which covered £5.5 billion of liabilities) across the Lloyds Banking Group pension plans.
"We are pleased to have successfully completed these transactions which further reduce the plan’s exposure to longevity risk and make the plans more secure to the benefit of all members," said Vicky Paramour, Lloyds Pension’s trustee director and chair of the investment and funding committee, in the news release. "The selection of Rothesay, Pacific Life Re. and PFI followed a fair, robust and transparent review of the longevity insurance and reinsurance options available across the market."
Sponsor company Lloyds is one of the largest retail banks in the U.K., having been founded in Birmingham in 1765.
