Rolls-Royce nears deal to offload $5.37 billion of UK pension liabilities, Bloomberg News reports

UK’s Rolls-Royce is close to announcing a deal with insurer Pension Insurance Corporation (PIC) to offload almost 4 billion pounds ($5.37 billion) in pension liabilities from the aircraft engine maker’s balance sheet, Bloomberg News reported on Friday.

The deal may be announced as soon as this month but talks could still be delayed or fall apart, the report added, citing people familiar with the matter.

PIC specializes in defined benefit pension schemes, known as bulk annuities. Demand for bulk annuities has surged in the last few years as companies seek to shed defined benefit, or final salary, pension schemes from their balance sheets.

According to Rolls-Royce’s 2024 annual report, its funded obligations under the so-called UK defined benefit schemes stood at 3.96 billion pounds, with associated assets of 4.74 billion pounds.

In July, PIC agreed to a 5.7 billion pounds takeover offer from specialised life insurance group Athora.

Rolls-Royce and PIC declined to comment on the Bloomberg report.