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Mayer Brown advises National Grid pension scheme trustee on £2 billion intermediated longevity swap deal with Zurich

16 May 2018
Mayer Brown's UK Pensions Risk Transfer Group advised the trustee of the National Grid Electricity Group of the Electricity Supply Pension Scheme on a fully intermediated longevity swap transaction with Zurich covering pension liabilities worth more than £2 billion.

The transaction will protect National Grid against the risk of rising costs as a result of around 6,000 pensioners and future dependent members living longer than expected. The insurance swap features sophisticated title transfer and fixed security collateral arrangements and has been structured to ease conversion into a buy-in or buyout of a pension scheme liabilities with a bulk annuity provider, if desired in the future. In addition, Zurich has reinsured a significant proportion of the longevity risk with Canada Life Reinsurance.

The Mayer Brown team was led by London Insurance partner and head of the UK Pensions Risk Transfer Group, Jane Childs, and included London Banking & Finance partner Stephen Walsh and counsel Marcin Perzanowski; Pensions partner Ian Wright and associate Liam Kellett; Tax Transactions & Consulting partners James Hill and Jared Goldberger (Houston); Restructuring, Bankruptcy & Insolvency counsel Alex Wood; and Litigation & Dispute Resolution senior associate Rachael O’Grady.

Commenting on the transaction, Jane Childs said: "We are delighted to have worked together with the group trustee and their team of advisers, leveraging our collective knowledge and expertise to deliver this strategically important investment. A particular highlight was using our firm’s signature strength in banking and finance to secure terms that provide flexibility for the group trustee as its investment needs vary over the life of the scheme."

Stephen Walsh added: "Our strong 'one-firm' culture came to the fore in this transaction. We delivered seamless and integrated advice through our Insurance, Pensions, International Arbitration and Banking & Finance practices in the UK, in addition to tax expertise from both our UK and US teams."