The Merchant Navy Ratings Pension Fund (MNRPF) has completed a £450 million (US$569 million) longevity risk transfer using a Guernsey-based captive.
MNRPF’s trustee owns the captive, which is managed by WTW Guernsey to facilitate the deal with Metropolitan Life Insurance Company (MetLife).
The arrangement secures benefits for MNRPF members while mitigating the fund’s exposure to longevity risks. Structured as an insurance contract, the deal integrates the captive into MNRPF’s investment portfolio, with MetLife acting as the reinsurer.
Melanie Cusack, trustee for MNRPF, says: “I am delighted that the trustee has taken an important step to ensure that our members’ benefits are strongly secured against increases in life expectancy.
“This is a continuation of our de-risking journey, and we are pleased to have completed the deal with attractive economics. This is a positive step in providing both additional security for members’ pensions and certainty for employers.”
Jay Wang, head of Risk Solutions at MetLife, states: “MetLife’s long history and expertise in risk management positions us well to offer greater certainty for MNRPF in relation to its longevity risk.
“We are pleased to have been selected for the reinsurance of this transaction. This transaction demonstrates MetLife’s commitment to supporting solutions which help pension schemes and insurers manage longevity risk.”
Shelly Beard, managing director at WTW, adds: “This transaction demonstrates that longevity swaps are an option for smaller tranches of liabilities. We worked with the trustee to achieve a competitive reinsurer selection process and attractive economics relative to the fund’s reserves.”
