Pension Insurance Corporation (PIC) has completed a £4.3bn buy-in with the Rolls-Royce UK DB pension fund.
This transactions covers the pensions of 36,000 people, which includes 15,000 pensioners and 21,000 deferred members. This buy-in cover the total liabilities of the Rolls-Royce fund.
Rolls-Royce is a well known UK-based engineering company, manufacturing engines and propulsion systems for commercial aircraft, regional jets and business aviation. It now operates in 48 countries.
The trustees of the fund said as key part of the transaction was securing an insurance partner who was able to delivering the same high level of customer care and support.
PIC as also been recognised by the Institute of Customer Service and has ISO accreditation and a BSI Kitemark for inclusive services for customers with vulnerable characteristics.
The insurance company has made total pension payments to policyholders of £16.2 billion, with a customer satisfaction rate of 99.3 per cent. During 2024, PIC made pension payments of £2.2 billion.
LCP acted as lead transaction adviser to the trustees while the pension fund received legal advice from Linklaters.
Mercer acted as scheme actuary and investment adviser. andPIC received legal advice from Addleshaw Goddard as their main adviser, with support from Herbert Smith Freehills Kramer on aspects of the transaction.
Rolls-Royce UK Pension Fund chair of trustees Liz Airey says: “We have invested significant time and effort over a number of years to provide our members with exceptional customer service. It was critical for us that we selected an insurer to secure our members’ pensions which is able to continue this.”
Helen McCabe, CFO, Rolls-Royce, said: “This is a win-win for all our stakeholders. 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.”
PIC chief origination officer Mitul Magudia adds: “It has been a pleasure working on this innovative transaction with the trustees and their advisers. They have developed an excellent customer experience offering for their members over the past few years. Ultimately the transaction hinged on who they felt would be best able to continue to provide the same levels of customer care and consideration.
“Following the announcement of our acquisition by Athora, which is subject to regulatory approval, we expect to have strong appetite to complete moretransactions like this in the future.”