The Merchant Navy Officers Pension Fund (MNOPF) has passed £1.5 billion worth of longevity risk to a reinsurer—a transaction agreed following the launch of its own insurance company.
Towers Watson assisted the £2.5 billion fund in creating a Guernsey-based insurance company, MNOPF IC, to take on the longevity risk of 16,000 pension members, which was ultimately reinsured by Pacific Life Re.
According to reports, it was Towers Watson's Longevity Direct platform that was used to access the longevity reinsurance market.
The structure is aimed at reducing the cost and governance requirements faced by a scheme in setting up its own cell insurance company.
Norton Rose Fulbright acted as the fund's legal advisor.
MNOPF chairman, Rory Murphy, said: "[The] announcement is good news both for our members and employers. This innovative transaction significantly reduces the overall risk in the fund and is a positive step on our journey to achieve full funding. "
