PIC secures £4.3bn buy-in for Rolls-Royce UK pension fund

Pension Insurance Corporation plc (PIC), a specialist in insuring defined benefit pension schemes, has finalised a £4.3 billion buy-in with the Rolls-Royce UK Pension Fund.

This landmark agreement safeguards the Fund’s outstanding liabilities, ensuring the pensions of 36,000 members—comprising 15,000 current pensioners and 21,000 deferred members—are fully secured.

Rolls-Royce PLC is a global leader in the design, manufacture, and servicing of advanced power and propulsion systems for mission-critical applications across air, sea, and land.

Operating in 48 countries and serving clients in more than 100, its customer base spans commercial airlines, aircraft leasing firms, armed forces, naval fleets, and the marine and industrial sectors.

For the Fund’s Trustee, a central priority in this transaction was selecting an insurer that shared its commitment to exceptional member care and consistent service quality—principles that have long guided the Fund’s management.

PIC is renowned for its service standards, having earned the Institute of Customer Service’s (ICS) ServiceMark with Distinction every year since 2017. The company also holds ISO certification and the BSI Kitemark for inclusive services supporting members with additional needs.

Since inception, PIC has paid out £16.2 billion in pensions to its policyholders, achieving a customer satisfaction rating of 99.3%. In 2024 alone, pension payments reached £2.2 billion.

Liz Airey, Chair of Trustees, Rolls-Royce UK Pension Fund, commented: “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. We are really delighted that PIC, which has a long track record of excellence in customer service, brought us such a strong proposition. We feel our members are in safe hands.”

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.”

Mitul Magudia, Chief Origination Officer at PIC, added: “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. We were delighted to be selected and proud that the Trustees have entrusted us with helping to continue to deliver this service to the members.

“Following the announcement of our acquisition by Athora, which is subject to regulatory approval, we expect to have strong appetite to complete many more ground-breaking transactions like this in the future.”

Michelle Wright, LCP Partner, Lead Transaction Adviser, noted: “This ground-breaking transaction epitomises what it means to put pension scheme members at the heart of decision making. From start to finish, we have been guided by the Trustee’s clear “member-first” principles, which have significantly raised the bar for member-centric insurance solutions. We are delighted to have been part of such an innovative, landmark transaction, which paves the way for other large pension schemes seeking a best-in-class solution for their members.”

James Maggs, Partner, Mercer, said: “This transaction marks the culmination of a decades-long journey of steady funding improvements. The key components of this finely-tuned engine – reliable investment growth, meticulous risk management, and timely monitoring – have driven the Fund forward with precision and resilience.

“As investment advisor and Scheme Actuary, Mercer is proud to have supported the Trustee throughout this journey, including helping it land smoothly at its final destination: one of the largest bulk annuity transactions that sets a new standard in prioritising the member experience.”

LCP served as the lead transaction adviser to the Trustees, while Linklaters provided legal counsel to the Fund. Mercer acted as the scheme’s actuary and investment adviser. PIC was advised by Addleshaw Goddard as its principal legal counsel, with additional support from Herbert Smith Freehills Kramer on specific elements of the deal.