6 Jun 2019 07:00
6 June 2019
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ROLLS-ROYCE INSURES BENEFITS TO PENSIONERS WITH TRANSFER OF LIABILITIES TO LEGAL & GENERAL
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Rolls-Royce announces its UK pension trustee has completed a deal to transfer certain pension risk liabilities to Legal & General Assurance Society Limited ("Legal & General").
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The deal covers the transfer of assets and liabilities relating to approximately 33,000 pensioners who are members of the Rolls-Royce UK Pension Fund out of a total of 76,000 members. The transaction will fully insure benefits payable from the fund and provide permanent security for pensioners, while reducing the Group's post-retirement obligations by around £4.1 billion. The residual obligations, which remain well funded, will be smaller with less risk for the Trustee and Rolls-Royce to manage in the future.
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Pensioners included in the transfer will have their benefits handled by one of the largest and most highly-rated insurance companies in the world, with expertise in insuring and administering pensions.
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Joel Griffin, Head of Global Pensions & Benefits, Rolls-Royce, said: "This agreement will result in increased security for Rolls-Royce pensioners and reduced risk for our business. Legal & General is one of the world's leading insurance companies and as a result of this deal the provision of benefits will be governed by stringent funding requirements, resulting in a secure pension environment for our pensioners."
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Stephen Daintith, CFO, Rolls-Royce said: "This is a significant transaction which represents another step on our journey to simplify, de-risk and strengthen the company. Rolls-Royce and the Trustees of the Rolls-Royce UK Pension Fund have worked intensely to ensure that the fund continues to have the resources it requires to meet its obligations. This agreement is a further step towards ensuring benefits for our pensioners."
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The deal will see Rolls-Royce make an exceptional cash contribution of around £30m. Free cash flow guidance for the Full Year remains unchanged. Alongside the transfer of around £4.1bn of liabilities to Legal & General, the Rolls-Royce trustee will also transfer around £4.6bn of assets. This results in a reduction in net assets of around £0.5bn though funding levels remain unchanged.
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About Rolls-Royce Holdings plc
1. Rolls-Royce pioneers cutting-edge technologies that deliver clean, safe and competitive solutions to meet our planet's vital power needs.
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2. Rolls-Royce has customers in more than 150 countries, comprising more than 400 airlines and leasing customers, 160 armed forces, 70 navies, and more than 5,000 power and nuclear customers.
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3. Annual underlying revenue was £15 billion in 2018, around half of which came from the provision of aftermarket services.
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4. In 2018, Rolls-Royce invested £1.4 billion on research and development. We also support a global network of 29 University Technology Centres, which position Rolls-Royce engineers at the forefront of scientific research.
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5. The Group has a strong commitment to apprentice and graduate recruitment and to further developing employee skills.
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For further information, please contact:
 Jennifer RamseyHead of Investor RelationsTel +44 (0) 7825 903206jennifer.ramsey@rolls-royce.com
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Richard Wray
Director of External Communications
Rolls-Royce plc
Tel: +44 (0) 20 7227 9163
richard.wray@rolls-royce.com
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Teresa Towner
External Corporate Communications Manager
Rolls-Royce plc
Tel: +44 (0) 20 7227 9036
teresa.towner@rolls-royce.com
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www.Rolls-Royce.com
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