Co-operative is second firm to ditch longevity swap deal
Sunday 06 June 2010
The Co-operative has become the second company in a week to ditch plans, through a so-called longevity swap deal, to insure itself against the risk of pension fund members living longer than anticipated.
Premier Foods recently spiked a plan to offload risk on a £2bn scheme, after the firm's finance director, Jim Smart, a former finance director at Friends Provident, claimed such contracts didn't represent value for money.
The Co-operative had been considering a new deal three years after it insured £2bn worth of pension fund assets through Swiss Re. But a spokesman for Co-operative Financial Services said such plans had been shelved: "Recently, we considered a potential longevity swap, but are not currently progressing this option."
According to a recent report from the consultants Lane Clark and Peacock, the price of longevity swaps is likely to increase, as the demand to ditch such risk outweighs supply.
Meanwhile, it's believed Prudential is looking to offload billions of pounds worth of longevity risk, too. The Pru, which has traditionally taken on pension fund risk through its annuities arm, has drastically cut back on writing new business because of the onerous capital requirements needed.
- 1 Planes go hybrid-electric in important step to greener flight
- 2 Antonio Martin shooting: Police and protesters clash over teenager's death just five miles from Ferguson, Missouri
- 3 British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
- 4 Hip hop is both racial and political, and for Iggy Azalea to suggest otherwise is insulting
- 5 Man hospitalised with pneumonia after downing eggnog at office Christmas party
British actor Idris Elba cannot star as James Bond because he is black, says shock jock Rush Limbaugh
Rozanne Duncan: Ukip expels councillor for 'jaw-dropping' comments made in BBC TV interview
Germany anti-Islam protests: 17,000 march on Dresden against 'Islamification of the West'
Ukip member gets into Christmas spirit with Union Flag plea to Santa 'for our country back'
BBC director Danny Cohen: Rising UK antisemitism makes me feel more uncomfortable than ever
Alex Salmond has 'broken his word to the Scottish people' says Scottish Lib Dem leader
iJobs Money & Business
Highly Competitive: Selby Jennings: Our client, a leading European Oil trading...
£43500 per annum + pension + holidays: The Jenrick Group: Night Shift Operatio...
£20000 - £25000 per annum + OTE £40,000 + Car + Pension: SThree: SThree are a ...
£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...