Rolls-Royce offloads final UK pension risk to PIC for £4.3bn
On 11 August 2025, Rolls-Royce Holdings said the trustee of the Rolls-Royce UK Pension Fund had secured a £4.3bn bulk annuity buy-in with Pension Insurance Corporation, covering the final defined benefit pension scheme backed by Rolls-Royce in the UK. The transaction insured the fund’s remaining liabilities for 36,000 members and was structured as a buy-in ahead of a later full buy-out.
| Metric | 2025 | Prior Year | Change |
|--------|------|------------|--------|
| Buy-in transaction size | £4.3bn | — | — |
| Members covered | 36,000 | — | — |
| Rolls-Royce net asset impact | -£0.6bn | — | — |
The members covered by the transaction comprise 15,000 pensioners and 21,000 deferred members. Rolls-Royce said the deal was funded from existing pension plan assets, with no additional funding required, although it would reduce the group’s net assets by about £0.6bn. In practice, that removes the company’s last UK defined benefit pension exposure from the balance sheet once the process is complete.
A buy-in transfers pension liabilities to an insurer in exchange for a one-off premium while the scheme remains in place, and this buy-in was secured in anticipation of a later buy-out. The full buy-out has since completed, according to reporting in July 2026.
Rolls-Royce said its UK defined contribution arrangement, the Rolls-Royce Retirement Savings Trust, was unaffected. LCP acted as lead transaction adviser to the trustees on the buy-in.
They also do not disclose the transaction’s pricing assumptions, discount rates or premium calculation spreads. That limits any assessment of how the premium was struck against the scheme’s asset portfolio or how the assets may fit into PIC’s matching adjustment fund.
PIC’s published solvency reporting has shown its Solvency II ratio rising for a second consecutive year because the solvency capital requirement fell by more than eligible own funds. Additionally, the matching adjustment is material to life insurers’ capital position when asset and liability cash flows are closely matched.
--- Sources: https://news.google.com/rss/articles/CBMiVkFVX3lxTE80MzNlMTI5cmNEV29tX0ozY2RvdF9nWlZkck8yNTFhUHdsZVZ1RGloUDlQRjJVMk5ERmttMlZQcmhsdEc0NWN0SVd0eW0yTkFDT0ZYZENn0gFWQVVfeXFMTzQzM2UxMjlyY0RXb21fSjNjZG90X2daVmRyTzI1MWFQd2xlVnVEaWhQOVBGMlUyTkRGa20yVlByaGx0RzQ1Y3RJV3R5bTJOQUNPRlhkQ2c?oc=5
Sources: news.google.com
