Heineken UK Investigates Longevity Swap Options
19 September 2012 (PLANSPONSOREurope.com) – Heineken UK will receive prices for a longevity swap from a handful of providers in the next few weeks.
The firm has requested estimates for insuring the longevity risk for an unspecified portion of the £1.5bn pensioner liability in its UK Scottish and Newcastle Plan.
Carol Young, pensions manager for Heineken UK told PLANSPONSOR Europe: “We are quite far down the line on this. We expect quotes from two or three providers to come back next month.”
She said the move is part of an ongoing de-risking strategy which has seen the plan put a liability driven investment strategy which hedges interest rates and inflation for approximately 40% of its £2.5bn portfolio, which has a £500m deficit.
The LDI strategy is run by BlackRock and is designed to increase the share of the portfolio it covers based on triggers in the price of its underlying derivatives.