A booming marketBulk annuity buyouts are rising sharply, and are heading for a record year in 2019. The market was worth £25bn last year, while consultant Willis Towers Watson expects deal values to hit £30bn this year. Today’s deal, meanwhile, represents more than one-third of the value of the whole market in 2017, of just £12bn. In September last year, British Airways announced a similar £4.4bn deal with Legal and General. The insurer also did a similar deal with Rolls-Royce in 2016, completing a £1.1bn buyout for the pension scheme of Vickers Group – a subsidiary. Read more: Rolls-Royce Trent 1000 repairs will be made ‘within budget’ Rolls-Royce has been battling to get a grip on its balance sheet in recent years. Issues with one of its flagship engines, the Trent 1000 model, have grounded jets across the globe. The engine powers Boeing’s 787 Dreamliner. Fixing the problems have been costly for the manufacturer.
The engineer said in its full-year results in March that its UK pension fund had £12.8bn assets and a £1.9bn surplus. Meanwhile, its overseas pension plans had a £1.3bn deficit.