Lloyds Banking Group Pension Trust Ltd has entered into three new longevity insurance and reinsurance deals to protect a further £4.8bn of pension liabilities against the risk of unexpected increases in members’ life expectancy.
The new arrangements cover pensioner liabilities across the three main schemes. The £3.1 billion deal for Lloyds Bank Pension Scheme No. 1 and the £700 million deal for Lloyds Bank Pension Scheme No. 2 are completed in December 2025.
The £1 billion linked to the HBOS final salary pension scheme ends in September 2025.
This follows two longevity insurance and reinsurance arrangements announced by the trustees in March 2025, covering a further £5.1bn of pensioner liabilities.
The transactions were structured as insurance policies with Rothesay Life Plc as the insurer.
Reinsurance for the Lloyd’s No.1 and No.2 programs is provided by a major global reinsurer, while the HBOS program is reinsured by a subsidiary of Prudential Financial Corporation (PFI).
Vicky Paramour, Director of Trustees and Chair of the Investment and Financing Committee, said: “We are pleased to have successfully completed these transactions, which further reduce the longevity risk faced by the scheme and make the scheme more beneficial to the interests of all members. The selection of Rothesay and the reinsurers follows a fair, robust and transparent review of the longevity insurance and reinsurance options available across the market.”
These latest transactions follow insurance and reinsurance arrangements entered into by Lloyds Banking Group Pension Trust Ltd between 2020 and 2025, covering in total the liabilities of Lloyds Banking Group Pension Schemes in excess of £25bn.
According to the announcement, the decision to enter into these transactions will not change the pension benefits that will be paid to members of the scheme.
All pensioners will continue to receive their monthly pensions as normal and these pensions will continue to be paid by the scheme.
Ben Howe, Head of Reinsurance at Rothesay, commented: “We are pleased to continue to work with trustees and reinsurers to deliver these de-risking solutions. In a busy pension risk transfer market, these transactions demonstrate the continued high demand for longevity protection from UK pension schemes as part of their wider strategy to mitigate potential funding volatility. The collaborative and solutions-led approach taken by all parties has facilitated the timely and efficient completion of insurance and reinsurance arrangements.”
Rohit Mathur, head of international reinsurance at PFI, said: “We are delighted to once again be working with Lloyds Banking Group pension trustees to develop tailored longevity solutions that support their specific de-risking needs. With our broad range of capabilities and expertise, PFI is uniquely positioned to meet the changing needs of pension schemes around the world and expand coverage for retirement security.”
Advisers on the transaction included WTW and A&P Shearman as lead advisors.
For more information on these and many more longevity insurance and reinsurance transactions, visit our sister publication Artemis.