L&G completes £4.6bn Rolls-Royce pension scheme deal

Rolls-Royce has completed a record £4.6bn pension deal with Legal and General (L&G), the UK's largest buyout to date.

Rolls-Royce will transfer the assets and liabilities of approximately 33,000 members in the bulk annuity transaction.

The Rolls-Royce UK Pension Fund (RRPF) chair of trustees, Liz Airey, said that she was “delighted to have achieved this outcome” for its members.

She continued: “The transaction will provide greater security and certainty around the retirement benefits our members have been promised.

“This has been made possible by careful risk management over many years and a strong collaboration between the trustee, Rolls-Royce and our advisers."

L&G has been providing investment management services to the RRPF for 20 years and will continue to do so for “a significant proportion” of its remaining £8.4bn asset portfolio.

L&G Retirement Institutional CEO, Laura Mason, added: "We have developed an excellent relationship over many years with Rolls-Royce, providing both investment and pension de-risking expertise and support.

“This transaction, which demonstrates the strength and expertise of the L&G team, is excellent news for the pension plan and the sponsor. It will provide enhanced security for plan members and the quality customer service for which L&G is known."

The RRPF has a total of 76,000 members and the deal will fully insure benefits payable from the fund and provide permanent security for the 33,000 covered, while reducing Rolls-Royce’s retirement obligations by around £1.4bn.

L&G had previously completed a buyout, in 2016, for 11,000 members of the Vickers Group pension scheme, which is part of the Rolls-Royce Group.

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