The Airways Pension Scheme is a UK corporate defined benefit pension scheme for British Airways members. Credit: Mariusz Klarowicz/Shutterstock.

British Airways’ Airways Pension Scheme has reached a longevity swap transaction with Metropolitan Tower Life Insurance Company, a subsidiary of MetLife, and Zurich Assurance (Zurich UK).  

The Airways Pension Scheme is a corporate defined benefit pension scheme for British Airways members. 

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This deal aims to transfer the longevity risk associated with £340m of the scheme’s liabilities, offering enhanced security for its members. 

The longevity insurance policy is an arrangement between the scheme’s Trustees and Zurich UK, with a corresponding reinsurance arrangement between Zurich UK and MetLife with Zurich UK’s pass-through solution.  

This pass-through solution allows MetLife to assume the longevity risk for approximately 1,100 scheme members, sharing mutual credit risk exposure with the trustees. 

The transaction is designed to be part of the scheme’s investment portfolio, providing income in scenarios where members outlive current life expectancy projections.  

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WTW served as the lead adviser for the trustees of the Airways Pension Scheme during the transaction. 

The trustees received legal guidance from Sackers and Kramer Levin, while MetLife and Zurich UK were advised by Eversheds Sutherland and Slaughter & May, respectively. 

Zurich UK Longevity Risk Transfer head Greg Wenzerul said: “We believe that the standardisation available through use of the Zurich platform, which has now been used with the vast majority of longevity reinsurers, provides an opportunity for smaller schemes to transact in an efficient and increasingly standardised manner.” 

WTW trustees lead adviser Shelly Beard said: “This is the second longevity swap announced in 2024 covering less than £1bn of liabilities, and the fifth in recent years to include non-pensioners, which goes to show that hedging longevity risk in this way is an option available to schemes of all shapes and sizes.”