Rolls-Royce Group plc has previously announced that it proposed to make a lump sum contribution of £500 million across its three main UK defined benefit pension schemes as part of a strategy to reduce the overall deficits. The payments were dependent on reaching agreement with the members on closure of the schemes to new employees and with the trustees on a change of investment strategy to significantly reduce the volatility of funding levels by achieving progressively a better match between assets and liabilities.
The Group is pleased to announce that during 2007 the necessary agreements have been reached, special contributions totalling £500 million have been paid and implementation of the revised lower risk investment strategies is largely complete across all three schemes. These changes will significantly reduce the volatility in the future funding level of the schemes, while providing greater confidence in returning the schemes to full solvency over an agreed timeframe.
Having played a very significant part in the discussions between the Group and the Trustees of its largest scheme, the Rolls-Royce Pension Fund, the Chairman of Trustees, The Rt Honourable The Lord Moore of Lower Marsh, has decided to retire from the post with effect from the end of the year.
Lord Moore said: “I have enjoyed my ten years as Chairman of Trustees enormously. It has been a challenging time for all involved in occupational pensions, but I do feel that at Rolls-Royce we have seen a willingness from all parties to engage in discussions with a determination to overcome the challenges we have faced. I am delighted to be able to retire as Chairman of Trustees, having reached an agreement which results in greatly improved security for beneficiaries and much more stable and predictable pension costs for the Group.”
Lord Moore will be succeeded as Chairman of Trustees of the Rolls-Royce Pension Fund by Paul Spencer, Treasurer of the Group between 1980 and 1986 and subsequently UK Chief Executive of Royal and Sun Alliance, Non Executive Director of Resolution Life and WPP Group and Chairman of National Savings and Investments.
Simon Robertson, Chairman of Rolls-Royce, said: “I would like to extend my special thanks to Lord Moore for his patient and professional leadership as Chairman of the Trustees, which helped all stakeholders to reach an agreement of benefit to the Group, its employees and its pensioners.
“I would also like to welcome Paul Spencer as Lord Moore’s successor as Chairman of the Trustees. His knowledge and business background will be of enormous benefit to all concerned.”