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Lloyds Banking Group Pensions Trustees has entered three new longevity insurance and reinsurance arrangements covering pensioner liabilities of £3.1bn in the Lloyds Bank Pension Scheme No.1, £700m in the Lloyds Bank Pension Scheme No.2 and £1bn in the HBOS Final Salary Pension Scheme.
These transactions, structured as insurance policies with Rothesay Life, closed in September and December 2025. Reinsurance is provided by an unnamed “major global reinsurer” for the Lloyds No.1 and Lloyds No.2 schemes, and by an insurance subsidiary of US company Prudential Financial for the HBOS scheme.
We are pleased to have successfully completed these transactions, which further reduce the schemes’ exposure to longevity risk and make the schemes more secure to the benefit of all members. The selection of Rothesay and the reinsurers followed a fair, robust and transparent review of the longevity insurance and reinsurance options available across the market,” said trustee director Vicky Paramour, who chairs the investment and funding committee.
Head of reinsurance at Rothesay Ben Howe said: “Within a busy pension risk transfer market, the transactions demonstrate the continued high demand for longevity protection for UK pension schemes as part of their wider strategy to mitigate potential funding volatility. A collaborative and solutions-led approach across all parties facilitated a timely and efficient process in the completion of both insurance and reinsurance arrangements.”
The trustees were advised by WTW. Lead adviser Matt Wiberg praised the collaborative efforts of all involved in completing the transactions, “enabling the trustee to capitalise on currently attractive market pricing and providing further security for members benefits”.
The latest longevity transactions follow two similar hedging deals in March this year which covered £5.1bn of pensioner liabilities with Rothesay, reinsured by Pacific Life Re and a subsidiary of Prudential Financial. Between 2020 and 2025 the trustees entered insurance and reinsurance arrangements covering more than £25bn of liabilities across the bank’s pension schemes and involving Pacific Life Re and French reinsurer Scor.
