Heineken agrees £2.4bn pension longevity swap


Heineken has entered into a longevity transaction for its defined benefit (DB) pension scheme with Friends Life, which is now part of Aviva.

The longevity swap transaction covers £2.4 billion of pension liabilities and insures the longevity risk for 19,000 pensioners who are part of the Scottish and Newcastle Pension Plan.

The transaction is aimed at providing funding security and protection against the financial risks of pensioners living longer than originally expected.

Towers Watson served as advisor to the joint trustee and working group for the transaction, while Travers Smith and Linklaters acted as legal advisors for the working group and for Friends Life, respectively.

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.”

Parfrey will be speaking at Employee Benefits Live 2015, alongside Virgin Media’s head of pensions and benefits, David Roberts, about how the election has impacted workplace pensions so far. The session will also focus on communications, and how employers can help their workforce better understand their pension and equip them for the future.

Employee Benefits Live 2015 will take place on 21-22 September at Olympia National, London.

View the full conference programme and register to attend.