Rolls-Royce Holdings plc Transfer of Pension Liabilities to Legal & General (2969B)
June 06 2019 - 2:00AM
UK Regulatory
TIDMRR.
RNS Number : 2969B
Rolls-Royce Holdings plc
06 June 2019
6 June 2019
ROLLS-ROYCE INSURES BENEFITS TO PENSIONERS WITH TRANSFER OF
LIABILITIES TO LEGAL & GENERAL
Rolls-Royce announces its UK pension trustee has completed a
deal to transfer certain pension risk liabilities to Legal &
General Assurance Society Limited ("Legal & General").
The deal covers the transfer of assets and liabilities relating
to approximately 33,000 pensioners who are members of the
Rolls-Royce UK Pension Fund out of a total of 76,000 members. The
transaction will fully insure benefits payable from the fund and
provide permanent security for pensioners, while reducing the
Group's post-retirement obligations by around GBP4.1 billion. The
residual obligations, which remain well funded, will be smaller
with less risk for the Trustee and Rolls-Royce to manage in the
future.
Pensioners included in the transfer will have their benefits
handled by one of the largest and most highly-rated insurance
companies in the world, with expertise in insuring and
administering pensions.
Joel Griffin, Head of Global Pensions & Benefits,
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."
Stephen Daintith, CFO, Rolls-Royce said: "This is a significant
transaction which represents another step on our journey to
simplify, de-risk and strengthen the company. Rolls-Royce and the
Trustees of the Rolls-Royce UK Pension Fund have worked intensely
to ensure that the fund continues to have the resources it requires
to meet its obligations. This agreement is a further step towards
ensuring benefits for our pensioners."
The deal will see Rolls-Royce make an exceptional cash
contribution of around GBP30m. Free cash flow guidance for the Full
Year remains unchanged. Alongside the transfer of around GBP4.1bn
of liabilities to Legal & General, the Rolls-Royce trustee will
also transfer around GBP4.6bn of assets. This results in a
reduction in net assets of around GBP0.5bn though funding levels
remain unchanged.
About Rolls-Royce Holdings plc
1. Rolls-Royce pioneers cutting-edge technologies that deliver
clean, safe and competitive solutions to meet our planet's vital
power needs.
2. Rolls-Royce has customers in more than 150 countries,
comprising more than 400 airlines and leasing customers, 160 armed
forces, 70 navies, and more than 5,000 power and nuclear
customers.
3. Annual underlying revenue was GBP15 billion in 2018, around
half of which came from the provision of aftermarket services.
4. In 2018, Rolls-Royce invested GBP1.4 billion on research and
development. We also support a global network of 29 University
Technology Centres, which position Rolls-Royce engineers at the
forefront of scientific research.
5. The Group has a strong commitment to apprentice and graduate
recruitment and to further developing employee skills.
For further information, please contact:
Jennifer Ramsey
Head of Investor Relations
Tel +44 (0) 7825 903206
jennifer.ramsey@rolls-royce.com
Richard Wray
Director of External Communications
Rolls-Royce plc
Tel: +44 (0) 20 7227 9163
richard.wray@rolls-royce.com
Teresa Towner
External Corporate Communications Manager
Rolls-Royce plc
Tel: +44 (0) 20 7227 9036
teresa.towner@rolls-royce.com
www.Rolls-Royce.com
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END
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