Rolls-Royce transfers £4.6bn of UK pension scheme to L&G

Rolls-Royce said on Thursday that its pension scheme has agreed to transfer £4.6bn of assets to Legal & General in what is the UK's largest ever bulk annuity.

The deal covers the transfer of assets and liabilities relating to about 33,000 pensioners who are members of the Rolls-Royce UK Pension Fund out of a total of 76,000, and the aerospace and defence company said it will reduce its post-retirement obligations by around £4.1bn.

It said the residual obligations, "which remain well funded", will be smaller with less risk for the Trustee and Rolls-Royce to manage in the future.

Joel Griffin, head of global pensions & benefits at Rolls-Royce, said: "This agreement will result in increased security for Rolls-Royce pensioners and reduced risk for our business. Legal & General 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."

The deal will see Rolls-Royce make an exceptional cash contribution of around £30m.