HSBC – Trustee announces additional security for DB member benefits

8 August 2019

HSBC Bank (UK) Pension Scheme publishes on its website:

“Today, HSBC Bank Pension Trust (UK) Ltd (“the Trustee”) has announced that it has taken an important step to enhance the security of benefits for members.

The Trustee has entered into its first longevity insurance arrangement that provides long term protection to the HSBC UK Pension Scheme (“the Scheme”) against the costs associated with increases in life expectancy of members. The transaction covers over 20% of the Scheme’s total exposure to improvements in longevity, arising from some £7bn of the Scheme’s liabilities.

The Scheme is transferring longevity risk to The Prudential Insurance Company of America (PICA). In order to facilitate the risk transfer to PICA, the Trustee worked with HSBC in Bermuda to set up a captive insurance company to give access to the reinsurance market.

The longevity insurance policy will form part of the Scheme’s investment portfolio and will provide income to the Scheme in the event that members live longer than currently expected.”

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