PwC advises ITV on pension deal with Credit Suisse
Broadcaster insures pension scheme with investment bank rather than insurance provider
PWC HAS ADVISED ITV on one of the largest pension swaps to date.
The broadcaster has entered into a pension longevity swap with investment bank Credit Suisse, the first in recent years to use a bank rather than an insurance company.
ITV will insure the pension fund through Credit Suisse based on the current predicted life expectancy. If people live longer than estimated, the insurance through Credit Suisse will kick in to cover extra payouts.
As businesses brace for increased life expectancy, PwC forecasts there will be dozens more longevity deals in 2011-12.
Raj Mody, (pictured) head of PwC‘s pensions practice and advisor to ITV, said: “Companies are realising that a more selective and analytical approach to the management of pensions risk can often be significantly more cost-effective than bundled solutions which inevitably carry a hefty premium.
“For longevity hedging, market capacity is finite and some deals will have better prospects than others.”
Currently the Credit Suisse scheme predicts that men who retire at 60 will live 26.6 years.
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