The Trustee of the ScottishPower pension scheme has entered into a landmark £2bn Longevity swap which means a reduction in the risk of the pension scheme for both members and trustees.
The scheme, which has around 9,000 pensioners across the UK, has implemented the swap – a relatively new and complex financial instrument - which transfers the risk of retired pension scheme members living longer than expected.
Shepherd and Wedderburn were the sole legal advisors to the pension fund trustees. Andrew Holehouse, Partner and Head of the firm’s Pensions Team, said:
“We’re pleased to have completed this complex transaction. To have reached a result which has such a positive outcome for all involved, trustees and members, is excellent. Longevity swaps are a relatively new innovation and have in the main tended to be the preserve of London City firms to date, therefore we are delighted to have now provided advice and a positive outcome for such a long-standing client of the firm.”
Speaking after the deal, Peter Thompson, Chair of ScottishPower Pension Scheme Trustees said:
“This is an important and positive step in the management of the Scheme’s liabilities and helps to improve the security of benefits for all members by reducing risk. Shepherd and Wedderburn advised the Trustees throughout with top rated guidance and counsel. The technical excellence of their work and the clarity of its delivery has resulted in a very favourable outcome for the Scheme.”