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Deutsche Bank secures Rolls-Royce pension deal

Deutsche Bank has cut a deal with the Trustees of Rolls-Royce Pension Fund in the form of a longevity swap that promises to reduce the risk on approximately £3 billion of the Fund’s liabilities.

Around 37,000 pensioners are covered by the agreement which, according to Deutsche Bank, will enhance the security of members’ benefits because the bank will hedge the longevity exposures of the scheme, passing on the risk to a syndicate of reinsurers.

Deutsche Bank says it is showing “clear leadership” in what is a growing market, having last year written longevity insurance with the BMW UK Pension Scheme for nearly £3 billion of liabilities, via its Abbey Life subsidiary.

Aon Hewitt was lead advisor to the Trustees on the latest transaction and the firm’s managing principal, Martin Bird, comments: “We worked closely with the Trustees to decide that this was the right approach for them to take and also that the swap was structured in a way that offered the best possible terms on price, security and other key longevity hedge features.”

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