Rolls-Royce and the Trustees of the Rolls-Royce Pension Fund have agreed a longevity swap that will give additional security to all members of the company’s final salary pension scheme. The contract with Deutsche Bank reduces the risk on approximately £3bn of the fund’s liabilities. The cost of this transaction will be borne by the pension fund and will have no material effect on the funding arrangements. Around 37,000 pensioners are covered by this agreement.
Andrew Shilston, Rolls-Royce Finance Director, said: “We have made sure that as our pensioners live longer in retirement we have made proper provision for them. This is the latest in a series of measures we have taken to achieve greater certainty for our future funding requirements”.
Paul Spencer CBE, Chairman of the Rolls-Royce pension fund trustees said: “We have been working closely with Rolls-Royce for some years to enhance the security of all our members’ benefits. This is another important step forward.”