Aon Hewitt Acts as Lead Advisor on BAE Systems Longevity Swap
LONDON, – Aon Hewitt, the global human resource solutions business of Aon plc (NYSE:AON), has announced that it was the lead advisor to BAE Systems and the BAE Systems 2000 Plan Trustees for their longevity swap with Legal & General. This longevity swap is the single largest pensions insurance transaction in the UK to date and further enhances Aon Hewitt’s status as leading advisors in pensions risk management.
The arrangement insures the plan against the longevity risk of its 31,000 current pensioners and covers
£2.7 billion of liabilities on the plan’s funding assumptions (equivalent to £3.2 billion of liabilities using a Libor swap curve discount rate).
Martin Bird, partner and head of Risk Settlement at Aon Hewitt, said:
“We worked closely with BAE Systems and the trustees of the plan on this significant transaction. The insurance arrangement is fully collateralised and tailored to reflect the plan’s unique profile, bringing together structuring capability and market capacity to enhance members’ security and reducing the funding volatility in the plan"
Matt Wilmington, partner at Aon Hewitt added:
“This transaction, along with others in the pipeline, demonstrates the capacity and appetite of the global reinsurance market to take on pension fund longevity risk. While there was some comment on an apparent contraction in potential counterparties last year, the number of ultimate risk takers – the reinsurers – continues to increase in a market which is becoming ever more competitive.”
Aon Hewitt expects to see a number of similar transactions in the coming months to add to those which have already taken place in the UK .
About Aon Hewitt
Aon Hewitt is the global leader in human resource solutions. The company partners with organisations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit www.aonhewitt.com.
Aon plc (NYSE: AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 61,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit www.aon.com for more information on Aon and www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.
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