Pensioners will continue to receive income as normal following reinsurance deal
AXA UK’s pension scheme has insured itself against the risk of soaring pay outs if its members live longer than expected
The company has announced that the AXA UK Group Pension Scheme has closed a longevity swap deal with Reinsurance Group of America (RGA) to secure £2.8bn worth of defined benefit pension liabilities.
Under the longevity swap deal, AXA’s pension scheme has made an upfront payment to RGA in return for income if its final salary scheme members live longer than currently anticipated.
The deal covers approximately 11,000 existing members of the AXA UK scheme, which is closed to new members.
Stephen Yandle, chairman of the scheme, assured its pensioners that they would continue to receive their payments as normal.
He said: “This is a very positive step in providing additional security of members’ pensions.”
The longevity swap deal represents a further step to derisk the company’s pension scheme, as part of which it has recently reduced its allocation to listed equities from 32% to 20%.
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