Redefining pension risk transfer through a member-first £4.3bn buy-in

LCP advised the Trustee of the Rolls-Royce UK Pension Fund on a £4.3bn full buy-in with Pension Insurance Corporation (PIC), insuring the benefits of all 36,000 members while keeping the Fund’s bespoke benefits and member services.

The challenge

The Rolls-Royce UK Pension Fund was targeting full insurance for its 36,000 members, but only on the basis it could maintain (or improve) the high-quality service its members had come to expect. The Fund had invested significantly over many years to offer a market-leading member experience – its member services, digital functionality and benefit options were bespoke to the Fund and more advanced than those typically offered by insurers at the time. 

Our approach

Working alongside the Trustee, LCP helped design a bespoke market process focused on member outcomes rather than transaction execution alone. The Trustee established a set of guiding principles at the outset which informed decision-making throughout the project. 

Key elements of the approach included:

• Shortlisting three insurers at the out set most likely to meet the Fund's bespoke requirements, encouraging stronger engagement and innovation.
• Running a ‘pre-RFP’ phase focused on member aspects – this was used to test ideas, refine transaction structures and explore creative solutions before requesting formal pricing and wider proposals.
• Undertaking member-focused workshops to understand impacts on different groups of members and develop tailored solutions where needed.
• Planning for life after buy-out from the outset, including data improvement work and operational readiness to support a seamless transition to buy-in and eventual move to buy-out.
• Early (and ongoing) engagement between Trustee and Rolls-Royce, as sponsoring employer to ensure objectives remained aligned and key terms were agreed in advance of buy-in.

The outcome: a £4.3bn buy-in with PIC and buy-out within a year 

The Fund completed a £4.3bn full buy-in with Pension Insurance Corporation (PIC) in August 2025 and moved to buy-out in July 2026, an exceptionally fast transition for a scheme of this size and complexity.

The transaction delivered several market-leading member focussed innovations, including:

• Continuation of the Fund's existing online self-service capabilities during both buy-in and post buy-out.
• Insurance of complex and bespoke member benefit options to maintain member entitlements.
• A tailored solution for around 5,500 employed deferred members, allowing enhanced benefits linked to employment to continue after buy-out.
• Ongoing availability of funded independent financial advice at retirement.
• An innovative single-premium structure (including illiquid assets) providing cost and timeline certainty while allowing post-transaction benefit and data work to continue. 

Why it matters for schemes planning a buy-in 

This transaction set a new benchmark for member-focused de-risking. By challenging established market practices and encouraging insurers to innovate, the Fund secured outcomes that were previously considered difficult or impossible to achieve through insurance. The approach has created a blueprint for schemes seeking to combine risk transfer with an uncompromising focus on member experience.