ARTICLE · 07 APRIL 2026

Pension Funds - Hedging Longevity Risk

Guernsey Finance

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Following interest rate hikes in 2023 and 2024, many UK defined benefit pension schemes (DB schemes) find themselves in significant surplus. According to PwC’s Buyout Index...

GuernseyEmployment and HR

Guernsey Finance

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Bulk Annuities Market

Following interest rate hikes in 2023 and 2024, many UK defined benefit pension schemes (DB schemes) find themselves in significant surplus. According to PwC’s Buyout Index, the UK’s 5,000 plus corporate BD schemes, were £95bn in surplus at the end of June 2025. As a result, many DB schemes are considering buyouts and competition in the bulk annuity market continues to be strong.

Longevity swaps

Guernsey has played a role in this sector by intermediating several longevity swaps for DB schemes over the last 14 years. The 17 longevity swaps transacted in Guernsey to date follow a similar structure. The DB scheme establishes a Guernsey-licensed special purpose vehicle insurance company (SPV). The SPV insures the longevity exposure of the DB scheme to its members and then reinsures those liabilities with a reinsurer. The SPV does not retain any net risk.

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