The contract reduces the longevity risk on approximately GBP3bn of the fund’s liabilities.
As per the agreement, which covers 37,000 pensioners, Deutsche Bank will hedge the longevity exposures of the scheme, passing on the risk to a syndicate of reinsurers.
Deutsche Bank managing director and European head of pensions origination Andrew Reid said Deutsche Bank has shown clear leadership in this growing market. Their team from across the Corporate & Investment Bank combined structuring expertise with Deutsche Bank’s balance sheet strength to deliver a cost effective solution for the Rolls-Royce Pension Fund.
Rolls-Royce finance director Andrew Shilston said that they have made sure that as their pensioners live longer in retirement they have made proper provision for them. This is the latest in a series of measures they have taken to achieve greater certainty for our future funding requirements.
Aon Hewitt was lead advisor to the Trustees on the transaction.
