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Travers Smith acts for the Scottish & Newcastle Pension Plan on £2.4b longevity hedge with Friends Life Limited

Monday, 10 December 2018
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Monday, 14 September 2015

Travers Smith Pensions Risk Management partner Peter Hughes and Finance assistant Vanessa Battaglia have advised the Scottish & Newcastle Pension Plan on a longevity transaction with Friends Life Limited, now part of the Aviva Group, to insure the longevity risk in respect of £2.4bn of the Plan's defined benefit pension liabilities.  The deal, announced by Heineken today, provides funding security and protection against the financial risk of pensioners living longer than originally expected.

Peter and Vanessa were assisted by a wider team from within Travers Smith including Pensions partner Susie Daykin, Pensions assistant Niamh O'Hagan and Financial Services and Markets Director of Research Nigel Barratt.

Having conducted an extensive process for selecting a partner to transfer the risk to, the Plan identified capacity within the insurance industry that had not previously been accessed. Towers Watson led the transaction as adviser to the joint Trustee and Company working group. Travers Smith acted as legal adviser to the working group.  Linklaters LLP acted as the legal adviser to Friends Life.

Neil Parfrey, UK Head of Pensions at Heineken, said “By hedging against longevity, we have reduced a significant amount of the Plan’s risk should the overall life expectancy of members exceed our projections. This should help bring peace of mind to Plan members, and we are delighted that it has been achieved in a cost efficient manner."


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