Linklaters and Clifford Chance (CC) have taken lead roles on Rolls Royce's longevity swap with Deutsche Bank, which is set to reduce the risk on approximately £3bn of pension fund liabilities.

Linklaters advised the company's trustees on the agreement, which will give additional security to all members of the company's final salary pension scheme. The magic circle firm fielded a team including capital markets of counsel Joan Ma and associates Kyara Mathias and Claire Warren, as well as pensions partner Claire Petheram and of counsel Lorna Buckland.

CC, meanwhile, advised Deutsche Bank on the transaction, the cost of which will be borne by the pension fund and will have no effect on the funding arrangements. CC's team was led by London-based derivatives and capital markets partner Andrew Coats.

One adviser commented: "The agreement ensures that as pensioners now live longer in retirement there is proper provision for them."

Rolls Royce, which makes engines for plane manufacturers Airbus and Boeing, said around 37,000 pensioners would be covered by the agreement.

The deal marks one of the first examples in recent years of a bank, rather than an insurer, providing longevity protection. The news comes three months after ITV agreed a similar pensions deal with Credit Suisse intended to protect against the risk of members of its defined benefit pension scheme living longer than expected.
Hogan Lovells and Sacker & Partners took lead roles on that deal, with Linklaters advising Credit Suisse.

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