August 31, 2016 / 8:36 AM / 3 years ago

Pirelli's main UK pension schemes agree 600 million pound longevity deals

A Pirelli's tyre is pictured at the headquarters in Milan March 26, 2015. REUTERS/Giorgio Perottino

LONDON (Reuters) - The two main UK pension funds of tyremaker Pirelli have agreed deals with insurer Zurich to farm out 600 million pounds ($785.94 million) of risk that members of the company schemes live longer than expected.

The two deals, constructed using a derivative called a longevity swap, were structured on behalf of the Pirelli General Pension and Life Assurance Fund and the Pirelli Tyres Limited 1988 Pension and Life Assurance Fund, consultant adviser Mercer said.

Tony Goddard, Pension Manager at Pirelli, said in a statement said the move was part of an existing plan to manage risks in the funds.

“The longevity swaps help to improve the security of benefits for all members by removing the uncertainty from members living longer than forecast,” he added.

($1 = 0.7634 pounds)

Reporting by Simon Jessop, editing by Sinead Cruise

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