Rolls Lowers Risk on Pension Plan With Deutsche Bank Accord

Nov. 28 (Bloomberg) -- Rolls-Royce Holdings Plc signed a contract with Deutsche Bank to lower the risk on its 3 billion pounds ($4.6 billion) in pension liabilities and cover for the financial burden of retired employees living longer.

The cost of the transaction will be borne by the pension fund and there will be no “material effect” on funding arrangements, the London-based company said in a statement. The so-called longevity swap covers about 37,000 pensioners.

“We have made sure that as our pensioners live longer in retirement we have made proper provision for them,” Finance Director Andrew Shilston said in the statement today. “This is the latest in a series of measures we have taken to achieve greater certainty for our future funding requirements.”

The move means Deutsche Bank will make payments to the fund to offset the additional cost when a retiree’s life extends beyond an agreed average expectancy.

To contact the reporter on this story: Andrew Noel in London at anoel@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net