PartnerRe Ltd. has been hired by the European Investment Bank to provide analysis for ?longevity risk? bonds it plans to sell to UK pension funds to protect them against clients who exceed their life expectancy.

The EIB, the European Union?s financing agency, will sell the bonds through BNP Paribas SA, Bloomberg News reported this week.

The so-called ?longevity bond? will be about ?540 million ($1 billion) in size and mature in 25 years, the banks said in a joint statement. The bonds? future cash flows are based on a fixed-rate annuity multiplied by the actual percentage of the English and Welsh male population surviving for 25 years after they have reached 65 years of age.

Interest paid will be highest in the first year and reduce through to maturity as members of each pension plan dies, though the longer members live the higher payments stay, said Thomas Schroeder, senior capital markets officer at the EIB, in a telephone interview from the bank?s headquarters in Luxembourg.

?The natural buyers of these bonds are pension funds because they are exposed to these kinds of cash flows,? Schroeder told Bloomberg. ?The payments under the bond are proportional to the cumulative survival rates.?