Investment - Articles - Legal and General in largest UK bulk annuity for Rolls Royce

Legal and General Assurance Society Limited (“Legal & General”) today announces that it has entered into another record breaking bulk annuity transaction: a partial buy-in to buyout with the Rolls-Royce UK Pension Fund (“RRPF”), in excess of £4.6bn, covering the benefits of around 33,000 in-payment pensioners.

 Legal & General previously partnered with Rolls-Royce in 2016, completing a £1.1bn buyout for the Vickers Group Pension Scheme, whilst Legal & General Investment Management Limited currently manages a significant proportion of the RRPF’s assets.

 As a result of this transaction, the relevant scheme members of the RRPF will benefit from the security of having a trusted insurance company responsible for the management of their pensions. Legal & General will be responsible for the administration and payments of these pensions once the transaction moves to buyout.

 Legal & General group is committed to helping companies reduce their pensions risk and honour the promises they’ve made to their employees, whilst investing to back our commitments directly in the UK and other economies. Recent investments include investing in the development of 167 new homes for Croydon Council tenants, new trains for Cardiff and investing in offshore wind to generate power for over a million homes in the UK.

 The transaction announced today also involved a number of significant and innovative solutions, including the transfer of a hedging portfolio and the restructuring of an existing longevity swap held by the RRPF.

 Legal & General has now transacted more than £6bn in global bulk annuity transactions in 2019 and has transacted four of the five largest UK bulk annuity deals.

 Laura Mason, CEO, Legal & General Retirement Institutional (“LGRI”), said: “Today’s announcement of the Rolls-Royce trustee’s transaction with Legal & General demonstrates the strength and expertise of our team and our ability to handle transactions of all sizes and complexity.

 Working collaboratively with the scheme and its advisors, we can provide the security of insurance, whilst also ensuring that the scheme members benefit from the quality customer service for which the Legal & General group is known.

 The scale of the transaction provides further opportunities for us to invest directly in the UK economy and make a positive difference in our towns and local communities.”

 Joel Griffin, Head of Global Pensions & Benefits, Rolls-Royce, said: “We’re delighted to be able to offer greater stability and certainty for the members of the Rolls-Royce UK Pension Fund by protecting the benefits of around 33,000 pensioners for the future through this transaction.

 This would not have been possible without the close collaboration and commitment of our Trustees and advisers over many years, ensuring that the scheme is well-funded.”


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