On 14 December 2022, the Trustee of the Barclays Bank UK Retirement Fund (UKRF) insured £7 billion of liability against longevity risk, with reinsurance provided by an insurance subsidiary of Prudential Financial, Inc. (PFI) of the United States.
This transaction helps protect the UKRF from the financial risk of any unexpected increase to life expectancy for current pensioners. This latest transaction is in addition to the £5 billion transacted with Reinsurance Group of America in 2020, and together results in over three-quarters of current pensioners’ longevity risk now being hedged. This continues the Trustee’s journey to make the UKRF more secure for the benefit of all members by reducing risk. As before, members will see no changes to their benefits, which will continue to be paid directly by the UKRF Trustee.
The transaction makes assumptions about how long pensioners will live. If pensions are paid out for longer than expected, then the transaction would provide income to the UKRF from PFI via the insurer.
Peter Goshawk, the Chair of the Trustee, said “This second longevity transaction is an important part of our continued de-risking of the UKRF and improves benefit security for all members. The success of the transaction is down to the collaboration and support of Barclays and the hard work of the Barclays’ pension team, PFI and our advisers, all of whom I would like to thank.”
About PFI
PFI (NYSE: PRU), a global financial services leader and premier active global investment manager with more than $1.3 trillion in assets under management as of September 30, 2022, has operations in the United States, Asia, Europe, and Latin America.
PFI of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.