Proactive Investors - Run By Investors For Investors

Legal & General wins largest UK pensions risk transfer deal from Rolls-Royce

The transfer of £4.6bn of assets and liabilities relating to the engine maker's pensioners will reduce its post-retirement obligations by around £4.1bn
pensions
L&G has now undertaken four of the UK’s five largest pension risk transfer deals

Rolls-Royce Holdings PLC's (LON:RR.) pension scheme has transferred £4.6bn of assets to Legal & General Group PLC (LON:LGEN) in what is the largest bulk annuity deal written in the UK.

The transfer of assets and liabilities to L&G relates to roughly 33,000 pensioners and will reduce Rolls Royce’s post-retirement obligations by around £4.1bn, the FTSE 100-listed group said in a statement on Thursday.

READ: Legal & General agrees first pension risk transfer in Canada for more than C$200mln

Rolls-Royce will pay a one-off cash contribution of around £30mln but said its free cash flow guidance for the full year remains unchanged.

Having now made four of the UK’s five largest pension risk transfer (PRT) deals, Legal & General chief executive Nigel Wilson said the Rolls-Royce transaction “again demonstrates our extensive strengths and synergies”.

He said the global PRT opportunity “remains sizeable and compelling”, noting that only 8% of the £2.2trn worth of UK defined benefit pension liabilities and 5% of the $3.5trn in the US have completed PRTs.

“Our pipeline and appetite for further transactions in H2 remains strong,” Wilson added.

Rolls-Royce finance chief Stephen Daintith said the deal “represents another step on our journey to simplify, de-risk and strengthen the company” and was a “further step towards ensuring benefits for our pensioners”.

View full RR. profile View Profile

Rolls-Royce Holdings PLC Timeline

Related Articles

computing symbols in cyberspace
January 15 2019
Its team of computer scientists designs algorithms that will be used by high-frequency traders, scientists doing genetic research and pharmaceutical companies

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use