Rolls-Royce has secured a deal to sell its UK pension scheme for £4.3bn to Pension Insurance Corporation (PIC), as it takes another step towards simplifying the business.
It is said the deal will provide certainty and security for the scheme’s 36,000 members with one of the UK’s largest regulated insurers.
The deal involves the final defined benefit pension scheme backed by Rolls-Royce in the UK. The buy-in includes the transfer of assets in exchange for an insurance arrangement that offsets liabilities.
It has been secured in anticipation of a full ‘buy-out’ – in which liabilities and management of benefits are transferred – of the scheme at a later date. The company’s UK defined contribution scheme, the Rolls-Royce Retirement Savings Trust, is unaffected.
Liz Airey, chair of Trustees, Rolls-Royce Pension Fund, said: “This is a landmark agreement that will result in increased certainty and security for Rolls-Royce pension scheme members. In PIC, we have found a partner who will also be able to maintain the high levels of customer service that our members deserve.”
Helen McCabe, CFO, Rolls-Royce, said: “This is a win-win for all our stakeholders. We are proud to have been able to fully fund and secure the pension promises made to colleagues, former colleagues and their families. This deal is also another step on our journey towards simplifying Rolls-Royce.”
