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Eversheds Sutherland advises Phoenix Life on conversion of longevity swap into £800m buy-in with the LV= Employee Pension Scheme

  • Global
  • United Kingdom

    28-07-2020

    Eversheds Sutherland has advised Phoenix Life on the conversion of its longevity swap into an £800m buy-in with the LV= Employee Pension Scheme.

    The Trustee of the LV= Employee Pension Scheme, working closely with its corporate sponsor, Liverpool Victoria Financial Services Ltd, (LV=), has converted a longevity swap held with ReAssure (reinsured by Swiss Re) into a c.£800m buy-in with Phoenix Life.

    This represents a significant de-risking step for the pension scheme and reduces volatility in the amount of capital that LV= is required to hold (as a regulated financial institution) in respect of Defined Benefit (DB) pension scheme funding risks.

    The Trustee entered into the longevity swap in 2012 and, following conversion to buy-in, Swiss Re will continue to cover the longevity risk by providing reinsurance to Phoenix Life. 

    Eversheds Sutherland’s role included advising on the front-end buy-in contract and the conversion documentation, including putting in place the longevity reinsurance.

    The Eversheds Sutherland team was led by corporate insurance Partner Hugo Laing with support from Principal Associate Harriet Sayer and Senior Associate Paul Denham.

    The team at Eversheds Sutherland also worked closely with the key deal team members at Phoenix Life Limited, including Justin Grainger (Head of Bulk Purchase Annuities), James Mushin (Head of Bulk Purchase Annuity Pricing) and Jake Turcan (Senior Legal Adviser).

    Hugo Laing, Eversheds Sutherland, commented:

    “This is the largest external buy-in Phoenix Life has written to date, coupled with the successful conversion of an existing longevity swap – we couldn’t have been more pleased to have helped our client reach this key milestone.

    “It was a pleasure working with the teams at Phoenix Life, LCP and CMS to ensure we achieved the very best outcome for all of the parties involved.

    It was also notable as one of the largest and most complicated transactions executed in this market during the Covid-19 Lockdown, requiring the parties to work particularly flexibly and collaboratively.”

    This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.

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