Rolls-Royce has issued a consultation to its pension members and trustees on whether they would allow the firm to close its defined benefit scheme four years ahead of schedule.

According to The Telegraph, the company is looking to save £500m in contributions to ease the financial pressure of Covid-19.

It had been planning to close the scheme to future accrual in 2014 but is seeking permission to bring this forward.

In the last financial year, Rolls-Royce contributed a total of over £150m to the scheme.

The scheme was closed to new members in 2007 but still has nearly 10,000 workers still accruing benefits.

It has a further 19,000 deferred members who have left the firm but are not drawing from their savings, and 13,000 pensioners who are drawing down.

In its latest financial report at the end of February, Rolls-Royce revealed its DB pension deficit had fallen by £849m to £208m.

The improved funding was primarily driven by a £4.6bn bulk annuity deal with Legal & General completed in June of last year.

The transfer process for 90 per cent of the buy-in liabilities was completed on 1 December 2019, which in turn saw £3.6bn of pension assets and liabilities derecognised from the groups balance sheet.

The remaining 10 per cent of the buy-in liabilities were transferred in January, which will see a further £408m in pension assets and liabilities derecognised in 2020.

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