Rolls-Royce Reaches Pension Deal With Trustees

Rolls-Royce Reaches Pension Deal With Trustees

Rolls-Royce Reaches Pension Deal With Trustees

British aero engine maker Rolls-Royce has reached a deal with the trustees of its pension fund to offset the risk of pension scheme members living longer than expected.

Rolls, the world’s second-largest maker of aircraft engines, on Monday said the longevity swap deal it had agreed would give additional security to all members of the company’s final salary pension scheme.

“The contract with Deutsche Bank reduces the risk on approximately GBP£3 billion (USD$4.65 billion) 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,” said Andrew Shilston, Rolls-Royce’s finance director.

“We have made sure that as our pensioners live longer in retirement we have made proper provision for them.”

Rolls said around 37,000 pension holders would be covered by the agreement.

“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,” said Paul Spencer, the chairman of Rolls-Royce’s pension fund trustees.

Earlier this month Rolls-Royce said it had performed well in the third-quarter and expects to deliver strong growth in full-year profit, shrugging off turmoil in financial markets.

(Reuters)



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