Rolls-Royce has secured a £4.3bn agreement with insurance specialist Pension Insurance Corporation (PIC) to transfer its º£½ÇÊÓƵ pension scheme as the engineering giant continues streamlining its balance sheet.
The agreement, unveiled on Sunday, encompasses the outstanding pension liabilities of 36,000 members - comprising 15,000 existing pensioners and 21,000 deferred members - representing the º£½ÇÊÓƵ's largest pension risk transfer this year, as reported by .
The move comes as Tufan Erginbilgic, chief executive of the FTSE 100 favourite, works to streamline the company's operations in pursuit of enhanced profitability. Disposing of the º£½ÇÊÓƵ scheme helps eliminate a significant source of financial burden affecting the giant.
Helen McCabe, Rolls-Royce Chief Financial Officer, said: "We are proud to have been able to fully fund and secure the pension promises made to colleagues, former colleagues and their families. This deal is also another step on our journey towards simplifying Rolls-Royce."
Rolls-Royce to inspire more deals
The buy-in enables the firm to shift pension obligations to an insurer for a single premium payment - with the insurer assuming responsibility for members' benefit payments. Such transactions have emerged as the elevated interest rate environment has supercharged the º£½ÇÊÓƵ's pension buyout market, making these arrangements more economical for companies.
Mitul Magudia, PIC's Chief Origination Officer, described the transaction as "innovative" and founded on shared principles with the Trustee. Rolls-Royce has upgraded its profit forecast on 31 July following a "strong start to the year" that saw revenue skyrocket by nearly £1bn.
The company reported an underlying pre-tax profit of £1.68bn for the first half of its financial year, a significant increase from the £1.03bn it recorded for the same period in 2024.
This announcement follows the historic moment earlier in July when Rolls-Royce's shares surpassed the £10 mark for the first time.
