Rolls-Royce hands a £4.6bn chunk of its pensions scheme to Legal & General
Rolls-Royce has offloaded a £4.6billion chunk of its pension scheme covering 33,000 members to Legal & General, in the biggest deal of its kind in the UK.
The record-breaking pension buy-out sees L&G take on around a third of the engineer’s total pension scheme assets.
Rolls – whose scheme covers 76,000 pensioners in total – said the remaining pension assets will be ‘smaller with less risk’ for the group and the pension trustees to manage in the future.
Rolls-Royce – whose scheme covers 76,000 pensioners in total – has offloaded a £4.6bn chunk covering 33,000 members to Legal & General
Joel Griffin, head of global pensions and benefits at the engine maker, said: ‘This agreement will result in increased security for Rolls-Royce pensioners and reduced risk for our business.
L&G is one of the world’s leading insurance companies and, as a result of this deal, the provision of benefits will be governed by stringent funding requirements, resulting in a secure pension environment for our pensioners.’
Rolls will pay L&G around £30million in cash as part of the deal.
The firm agreed a pensions deal with trade unions last May to keep its final salary pension scheme open to existing members until 2024 and to boost benefits to younger workers from 2021.
The move will save the group £145million over the next three years.
L&G uses its funds to invest in major UK projects, such as housing developments.