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BT longevity swap points way for pass-through structures

The record longevity swap announced by BT recently uses a structure that will only appeal to the largest pension schemes, say experts. However, elements of the deal might be picked up by others, particularly the idea of schemes taking on the counterparty risk of reinsurers

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BT longevity swap adds to structuring options

BT's pension fund announced on July 4 a longevity swap equalling the entire volume of transactions last year, but – unusually – there was no bank or insurer as intermediary on the deal.

Instead, the BT scheme transacted directly with Prudential Insurance Company of America as reinsurer, setting up a wholly owned insurance vehicle in Guernsey to make doing so possible.

"By using a wholly owned

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