Rolls-Royce offloads UK pension fund in £4.3bn deal with PIC
Rolls-Royce has sealed a £4.3bn deal with insurance specialist Pension Insurance Corporation (PIC) to offload its UK pension scheme as the engineering giant presses ahead with simplifying its balance sheet.
The deal, which was announced on Sunday, covers the remaining pension obligations of 36,000 members — including 15,000 current pensioners and 21,000 deferred members — and marks the largest pension risk transfer in the UK this year.
It comes as the Tufan Erginbilgic, chief executive of the FTSE 100 darling, moves to slim down the company’s operations in a bid to boost profitability. The disposal of the UK scheme helps remove a key source of financial drag weighing on the giant.
Helen McCabe, Rolls-Royce Chief Financial Officer. “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 allows the firm to transfer pension liabilities to an insurer in exchange for a one-time premium — with the insurer taking over the responsibility of paying members’ benefits. Similar deals have come as the rising interest rate environment turbocharged the UK’s pension buyout market, making it more affordable for companies to strike such deals.
Mitul Magudia, PIC’s Chief Origination Officer, said the transaction was “innovative” and rooted in shared values with the Trustee.
Rolls-Royce has raised its profit guidance on July 31 after a “strong start to the year” where revenue soared by almost £1bn.
The group reported an underlying pre-tax profit of £1.68bn for the first half of its financial year, up from the £1.03bn it posted for the same period in 2024.
The results came after Rolls-Royce’s shares passed the £10 mark for the first time in its history earlier in July.