Welcome to the Trustee’s 2023 newsletter

The Trustee has had another busy year looking after the Fund. In addition to its regular agenda, it focused on a number of other key priorities, including:


Trustee effectiveness

Environmental, Social and Governance (ESG)


Cyber security

Despite the turbulent markets caused by the impact of the mini budget in 2022, funding levels remained strong due to our low risk and conservative investment strategy. In fact, funding levels actually strengthened over the period. During this period it was essential that the Trustee was able to keep a close eye on its funding levels and this was helped by the change of actuary to Mercer. The introduction of their new monitoring tool called Pfaroe, enabled the Trustee to have daily visibility of funding levels. Read more detail about this at the link below.

We’ve implemented the recommendations made under the trustee effectiveness review carried out by Willis Towers Watson (WTW). Find out more through the link below.

We continue to consider responsible and sustainable investment of the Fund’s assets. You can find out more here.

We’ve continued the important work of data cleansing and upgrading our administration systems to a cloud-based environment. Find out more via the link below.

We’ve implemented recommendations made by our internal audit partners, Ernst & Young, in their 2021/22 audit regarding cyber security. In addition, we asked our internal Rolls-Royce cyber experts to help in this area by delivering training to the Trustee Board on cyber security. They’re now working with the pensions team to conduct an in-depth audit of processes and procedures covering calculations and pension payments. Read more about this here.

It’s our triennial actuarial valuation year, where the Fund’s assets and liabilities are formally assessed. It’s early in the process but draft assumptions are indicating that there has been a further improvement in the funding level. In last year’s newsletter, we reported that the funding level improved from the pandemic-impacted valuation low of 105% on 31 March 2020, to 110% as of 31 March 2022. There are different ways in which funding is monitored and you can find out more using the link below.

The Trustee Board saw some changes during the year, with Stuart Hedley leaving the Board and being replaced by Mark Barron. Following Mark McIntosh’s retirement in June 2022, Jane Stockwell replaced him on the Board.

Our best wishes have already been extended to both of our departing Trustee Directors. We’d like to welcome our two new Trustees, who we are delighted to have on board. They have added additional skills and attributes to the Trustee Board and having been through a thorough induction process, are settling in well as Trustee Directors.

The year’s key events are set out below. (Click on the headings to read more.)

We are currently conducting our triennial actuarial valuation. The plan is to sign this off by the end of 2023 so we can communicate the results to you early next year. Early indications, based on draft assumptions, suggest there has been a further improvement in the funding level.

The valuation measures our funding level on what is termed a technical provisions (or ongoing) basis, which is the amount needed to pay all member benefits in full as they become due. This is based on assumptions that are agreed every three years between the Trustee and the Company.

On this basis, the funding has improved over the three years since the last triennial valuation: 105% on 31 March 2020, 108% in 2021, and 110% in 2022. We believe this position has improved further this year.

We also monitor the solvency funding basis, which is the amount required to secure annuities with an insurance company for all members. On this basis, the funding level is around 95%, which means the Scheme doesn’t currently have enough to buy annuities for all members.

As part of the valuation, the Trustee will review the covenant (the strength of the employer) with help from its covenant adviser, Penfida.

The administration department has continued to work on updating members’ records and ensuring that the data we hold is accurate. We encourage members to register on our website as this is the best way to keep your information up to date and accurate. It’s also the best way for you to stay in touch with Fund news throughout the year.

The team has also been working hard on the migration of the system to a cloud-based environment, which will increase the reliability and security of the administration system and allow us to take advantage of the latest software developments.

Over the year, we issued information to deferred members about how pensions revalue in deferment. These are slightly different for each section of the Fund:

We also issued this reminder to members who are still working at Rolls-Royce about forthcoming changes to their death-in-service and Medical Early Retirement benefits. All affected members will receive a personal statement in November 2023 explaining their benefit entitlement from 1 January 2024.

We brought in Willis Towers Watson (WTW) to independently assess the Trustee Board’s effectiveness both in terms of governance but also behavioural skills. WTW delivered the results of this exercise in 2022 and the Trustee Board has been working to implement the recommendations.

It was a useful exercise, helping the Trustee Board understand individual strengths and gaps. More practically, as part of this exercise, several new committees were introduced to help streamline Trustee business:

  • The Investment Implementation & Funding Committee;
  • The Communications Committee (which is a joint committee with the Retirement Savings Trust);
  • The Discretions Committee, which deals with all discretionary cases;
  • The Equalisation Committee.

In addition, the Audit Committee became the Audit & Risk Committee, and the Nominations Committee became the Nominations & Governance Committee.

I’d like to again extend my thanks to the Trustee Directors for their professionalism and dedication through yet another busy year, the pensions executive and the wider pensions department for their support and resilience, and to the Company for their openness and collaboration.

Liz Airey
Chairman of the Trustee

We have three categories of membership in the Fund. To help you find information that’s relevant to you, we’ve categorised each section of the newsletter.

Employed deferred members

Employed deferred members

Current Rolls-Royce employees whose membership became deferred when the Fund closed on 31 December 2020.

Deferred member

Deferred members

Former employees who became deferred before 31 December 2020.

Pensioner members

Pensioner members

Members who are receiving a monthly pension payment from the Fund.

Category icon for Deferred members Category icon for Pensioner members


After the successful launch in 2022 of our new-look estimator, providing easy access to a range of additional retirement options, we’ve taken things a step further in 2023.

Whatever your age, you can always check your entitlement using our online estimator. It can produce early, normal and late retirement estimates for every option available to you and even provide an update if you’ve not reached the age where you can access your benefits.

You can choose a current date or one in the future for your estimate, which gives you the chance to make plans for accessing your benefits. Watch the overview video to find out more.

Adding to this, July saw the launch of our latest upgrade to the online estimator, aimed at members who are ready to start taking their benefits. A formal retirement quote now allows you to build your own combination of retirement benefits online, with the option to compare, save and download your customised results.

And once you’ve decided what you want to do, you can continue online to put your retirement benefits into payment. Identity checking and age verification is completed automatically with no need to send paperwork to the pensions team.

Whether you’re planning for the future or getting ready to retire, the best and quickest way to get the information you need is to use the online estimator. Log in for access anytime at And if you need help with registering, please read our guide.


In response to your feedback last year, we’ve categorised the 2023 newsletter contents by membership status and added more content for pensioner members. We’re always looking to develop the newsletter, so please let us know if you think there’s anything that we’re not covering by emailing

Category icon for Deferred members Category icon for Pensioner members Category icon for Employer deferred members


The date of the Fund’s last actuarial valuation, 31 March 2020, was at the point when the impact of the pandemic on markets was at its height.

Since then, we’ve seen a steady improvement in the funding level on an ongoing basis. As of 31 March 2022, the funding level on this basis was around 110%. The mini budget under Liz Truss’ government led to one of the most severe market movements we’ve seen in a long time, with a massive spike in gilt yields. This caused a knock-on effect to pension funds that had invested in Liability Driven Investment (LDI) strategies.

The Fund is largely invested in LDI strategies, and these have served us extremely well in the past and protected us against volatile market movements, like the ones we saw during the pandemic. Our LDI strategy, in keeping with our overall investment strategy, is extremely cautious, which meant that there was very little impact on the Fund when gilt yields spiked.

Although the Fund’s assets fell over the year, due to the rise in gilt yields, this was offset by a corresponding reduction in the Fund’s liabilities – the cost of paying benefits to members.

The government has since issued guidance for pension schemes that invest in LDI, and we are reviewing this guidance to ensure that our strategy complies with best practice.

What’s a gilt?

A gilt is a UK Government bond. It’s essentially an IOU from the government paying a fixed rate of interest over a fixed period.

A gilt can be traded on financial markets and the price paid for it will depend on how attractive it is to buyers.

What’s a gilt yield?

It’s the gilt’s rate of interest, divided by the price paid for the gilt. Remember, the interest rate never changes on a gilt.

Here’s an example using a £100 gilt that has been issued paying 4% interest. Its yield is 4%.

If it had been bought for £110 on the financial markets at a later date, the yield would be 3.6%. Alternatively, if it had been bought for £90, the yield would be 4.44%.

The mini budget problem

The 2022 mini budget caused significant turbulence in financial markets, with a knock-on effect on gilts.

This affected many pension schemes with low-risk, matching investment strategies called Liability Driven Investment (LDI), who were in danger of having to sell their gilts at significantly lower prices to maintain their LDI strategies. Without the Bank of England’s action to stabilise the gilt prices, pension schemes could have potentially suffered.

Our next triennial valuation is due on 31 March 2023, and we’ll share the results of this valuation with you in 2024.

The Trustee’s key focus throughout all of its activities is the security of your benefits and ensuring that you receive the benefits you have been promised. This is why building up a good surplus is important – it acts, and has acted, as a cushion to protect benefits when market movements have negatively affected our assets.

Category icon for Deferred members Category icon for Pensioner members Category icon for Employer deferred members


Cyber attacks can affect individuals, companies and even governments – and the pensions world is not immune. There have been recent breaches at the Pensions Ombudsman, and members of company pension schemes (including Marks and Spencer, Royal Mail and Unilever) were affected following a cyber attack at the outsourcing service provider, Capita.

The Trustee takes this very seriously and asked our internal audit partners, to conduct a high-level audit of our cyber security last year. Their recommendations are currently being implemented. Ernst & Young will also carry out an audit later this year into our record keeping, benefit calculations and migration of the pension administration system to a cloud-based environment.

In addition, we collaborated with the internal Rolls-Royce cyber security team, who provided training on cyber risk to the Trustee Board. They are following this up with an in-depth audit of our systems, covering member benefits, payments and cash management. They will work with us on any recommendations.

Category icon for Deferred members Category icon for Pensioner members Category icon for Employer deferred members


The Trustee Board is made up of six Company-appointed Trustee Directors, including an independent Chairman and a Director nominated by the Company’s Central Negotiating Committee (CNC), and four Member-Nominated Directors.

The current Trustee Directors are:

Liz Airey!

Liz Airey

Independent Chairman

Jo Durkan

Jo Durkan

Company appointed, Assistant Treasurer, Derby

Iain Foster

Iain Foster

Company appointed, Commercial Director, Civil, Derby

Steve Jones

Steve Jones

CNC nominated, Instrument Maker, Bristol

Will Mansfield

Will Mansfield

Company appointed, former Group Chief Accountant, Derby

Jane Stockwell

Jane Stockwell

Company appointed, SVP Commercial and Legal, Civil, Derby

Paul Butler

Paul Butler

Member nominated, pensioner

Mark Barron

Mark Barron

Member nominated, Manufacturing Engineer, Washington

Colin High

Colin High

Member nominated, Innovation Hub, Inchinnan

Mark Porter

Mark Porter

Member nominated, Works Convenor / Chair of UK Council, Rolls-Royce plc, Barnoldswick

Over the year to 31 March 2023, the Trustee Board held 10 main Board meetings. In addition, the Trustee Directors sit on several standing committees and working parties that are detailed below.

Trustee Directors serve four-year terms with a maximum of two terms before rotating off the Board. During the year, Stuart Hedley stepped down after his second term in office and was replaced by Mark Barron.

In addition, Paul Butler will reach the end of his first term of office on 30 November 2023. Paul has indicated that he will be applying for a second term, however we’re still keen to hear from anyone interested in serving as a Member-Nominated Trustee Director. This vacancy is only open to members who are not currently employed by Rolls-Royce, and further details can be found here. Being a Trustee Director can be a very rewarding role, and full training and support is offered to anyone who joins the Board.

We now have several standing committees and working parties, assisting with the governance of the Fund:

Investment Implementation & Funding Committee

This committee will be concentrating on the triennial valuation this year.

Audit & Risk Committee

They are responsible for the formal annual report and financial statements, internal controls, risk management and mitigation processes.

Nominations & Governance Committee

This committee is responsible for the appointment of Member-Nominated Directors and overseeing the Trustee Board’s governance arrangements.

Communications working party

This is a joint working party with the Rolls-Royce Retirement Savings Trust. It’s responsible for agreeing all communications to members.

Discretions Committee

This committee deals with all cases where Trustee discretion is required, such as settling death benefits.

Equalisation working party

They will be working to address any outstanding benefit equalisation issues.

Trustee Directors are expected to sit on at least two of these committees as well as attending main Board meetings.

Trustee remuneration

Seven of our Trustee Directors are current Rolls-Royce employees and serve on the Trustee Board without additional pay.

The Trustee Board’s Chair, who is an independent appointment with no other connection to Rolls-Royce, and two of our Member Nominated Trustees, representing deferred and pensioner members of the Fund, are paid a fee for performing their roles. The Company sets the remuneration policy for the Trustee Board.

The fee paid to the Chair is determined by benchmarking the position against similar independent Trustee Chair positions. The Fund pays a fee of £5,000 a year to our pensioner Trustee Director and £15,000 a year to our deferred Trustee Director, reflecting his additional role as chairman of our pension audit and risk committee.

In setting these amounts, the Company has considered the time commitment required and best practice within the pensions industry. Please refer to this Q&A for more information.

Category icon for Deferred members Category icon for Pensioner members


You’re only legally required to take financial advice if you’re transferring your benefits out of the Fund and the transfer value is over £30,000. Because of this, members often assume that advice is only of use when transferring benefits.

However, we strongly recommend you take advice in all circumstances, irrespective of whether you’re transferring out or taking your Fund benefits. Try to think of the service as retirement advice, helping you to navigate your way through the various options open to you.

Retirement is a one-off event and taking financial advice helps ensure you’re choosing the benefits that are most appropriate for your individual needs.

The Company and the Trustee have appointed WPS Advisory as our preferred provider of independent financial advice. Their service is available to all Fund members. If you’re an employed deferred member over the age of 55 and are taking your benefits when leaving employment, the cost of the advice is met by the Fund, up to a limit of £875 per member. Although the advice is funded, you may incur a small tax charge as HM Revenue & Customs class this as a taxable benefit in kind.

If you don’t qualify for the funded advice, you are still entitled to a heavily discounted preferential rate of £875 plus VAT. This level of advice is generally sufficient for most members, but if you need additional services or have complicated financial circumstances, the cost may be higher. WPS Advisory will let you know in advance what these costs might be.

Members have told us that the WPS Advisory service can sometimes be protracted, and that they sometimes experience delays. We’ve worked with WPS Advisory to launch a new registration process that’s integrated with our online retirement estimator. When you request a formal quotation of your retirement benefits, you’re prompted at the right time to register, which greatly speeds up the process.

Find out more about WPS Advisory by logging into your online account or by clicking here.

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Many of you decide to transfer your benefits at retirement, especially those eligible for a Share of Fund transfer value. This is an important and often life-changing decision, so it’s very important to take proper advice.

The Fund is here to provide a pension for you and has expanded its range of options to provide more flexibility. If you decide to transfer instead of taking a pension option, you must take appropriate advice and allow sufficient time for this complex process to be managed properly.

If you’re planning on using your own adviser rather than the Trustee’s preferred provider, WPS Advisory (see above), please be careful who you use and be aware of potential scammers. Sadly, we’ve had to report advisers to the Financial Conduct Authority in the past, who have specifically targeted members of our scheme.

If you use your own financial adviser, the cost of the advice won’t be met by the Fund. Make sure you understand your financial adviser’s charges, as they are often quoted as a percentage of the transfer value, which might seem small but could amount to a large sum. For example, if your transfer value is £400,000 and your adviser is charging you 3%, this is a charge of £12,000. Compare this to the cost the Trustee and the Company have negotiated with WPS Advisory, which is a flat-rate fee of £875 plus VAT per member. And in some cases, this fee is funded by Rolls-Royce and the Trustee.

Many transfers are also subject to additional, ongoing charges after the transfer has taken place. Make sure that your adviser explains these charges to you and get it in writing, too.

The MoneyHelper website, provided by HM Government and The Money and Pensions Service, will give you the knowledge to protect yourself from pension scams. If you’re transferring your pension, take a few minutes out to make sure you’re Scam Aware. Click here to find out more.

We have also provided information on the pension member website about financial advice and reported scams, to help you keep your pension safe. Click here to see our detailed Transfer Guide and read the news story in your online account.

Please take every precaution when transferring your benefits away from the Fund. To make sure you’re getting the right advice, please consider using the services provided by WPS Advisory, as they are recommended by both the Trustee and the Company.

Category icon for Deferred members Category icon for Pensioner members Category icon for Employer deferred members


Responsible Investment (RI) has been on the Trustee’s agenda for some time and has continued to progress. Much of this is in response to regulatory requirements as this issue gains traction globally. Investing sustainably means balancing the needs of the economy, society and the environment. This approach is often shortened to ESG.

Sustainable Investment

We have been considering how to invest the Fund’s assets in a way that protects your benefits from all risks, including environmental, social and governance (ESG) risks. It should be noted that we have a legal responsibility to invest the assets in the best way possible for all members. In this respect, ESG is looked at through a financial lens and decisions taken where this will be of long-term benefit to the Fund.

So far, we have agreed:

  1. To produce and consider an annual responsible investment report to help improve the Fund’s approach to ESG risks and opportunities
  2. To adopt the Financial Stability Board’s Task Force on Climate-related Financial Disclosures (TCFD) which requires publication of an annual TCFD statement – this will be the fourth year we have produced this
  3. To periodically analyse the potential strategic impact of climate change on the Fund across different scenarios.

In addition, we have agreed climate-related investment targets, summarised here:

  1. Net zero greenhouse gas (GHG) emissions across all investments by 2050
  2. Minimum 50% reduction in GHG emissions of the investments, excluding the Liability Driven Investment (LDI) and private equity portfolios, by 2030, relative to 31 December 2021 levels
  3. Minimum 50%/55% reductions in weighted average carbon intensity* of the investment-grade credit portfolios by 2025/2030, relative to 31 December 2021 levels
  4. A range of individual targets for each investment-grade credit portfolio to be achieved by 2030, relative to 31 December 2021 levels.

We continue to consider responsible investment themes when developing and monitoring its investment strategy. We’ll continue to follow best practice with the help of our investment advisers.

*The average, based on the size of the Fund’s holding in each investment, of the greenhouse gas emissions (in metric tons) divided by revenue (in $million) associated with each investment.

Category icon for Employer deferred members


You can find everything you need to know about your pension by logging into your online account at

You can see the level of your pension, check your tax code, download payslips, and get all the latest news that’s relevant to pensioner members. If you want to change your address, contact details or the bank account that your pension is paid into, you can do that quickly and easily online too (UK bank accounts only).

We pay our monthly pensions on the first working day of each month. These are paid ‘in advance’, so the payment you receive at the start of the month covers that month. We only post out paper payslips when your net pension changes by more than £1, but monthly payslips are still produced and can be downloaded by logging into your online account.

Your pension has a tax code allocated to it by HM Revenue & Customs (HMRC), which instructs us to deduct tax and pay it to them on your behalf. We can only change your code when instructed directly by HMRC and can’t tell you how its been calculated. If your tax code changes and you’ve not received a notice from HMRC explaining this, contact them to ask why. There are a number of ways to contact HMRC, and you can find them all here.

We post out a payslip to every pensioner member at the start of April and this doubles as your P60 end-of-year certificate. It tells you how much we’ve paid you and how much tax has been deducted during the tax year 6 April to 5 April. You should keep this safe in case you need it when completing a tax return or proving your income to benefit agencies and lenders. If you can’t find it when you need it, your P60s are stored on your online account and can be downloaded at any time.

Most of our pensions in payment receive increases on 1 April each year. We publish what the increases are in your online account every March, and you can also see what your new pension will be by checking your account shortly before your April pension payment. The 2023 pension increases are explained here.

Like wages, we know that pensions have not been able to keep pace with the current high level of inflation in the UK. If you’re struggling, it’s worth visiting the government’s MoneyHelper website. As well as lots of useful information about day-to-day money matters, you can get specific help and advice here about dealing with the cost of living crisis.

Category icon for Deferred members Category icon for Pensioner members Category icon for Employer deferred members


The Fund’s latest report and financial statements to 31 March 2023 can be found here, but you can read a user-friendly summary by clicking the button below.

The table below summarises the Fund’s accounts for the year ended 31 March 2023. These accounts were audited by Deloitte LLP, the Fund’s independent auditor.

From the accounts

What was paid in
Your contributions - -
Company contributions 434 737
Total contributions 434 737
Transfers in 69 416
Other income - -
Total 503 1,153
What was paid out
Benefits to members and dependants (110,502) (112,148)
Transfers (174,662) (376,485)
Other (476) (1,764)
Administrative expenses (3,944) (3,286)
Total (289,584) (493,683)
How investments performed
Investment income 243,087 197,518
Change in market value of investments (2,607,818) (156,240)
Investment management fees (7,554) (8,509)
Taxation (142) (0)
Total (2,372,427) 32,769
The wider picture
Balance at the start of the Fund’s financial year 8,076,748 8,541,051
Add what was paid in 503 1,153
Take away what was paid out (289,584) (493,683)
Take into account investment returns (2,372,427) 32,769
Balance at the end of the Fund’s financial year 5,415,240* 8,081,290

* the assets fell over the year due to the significant rise in gilt yields following the 2022 mini budget. You can find out more about this in the ‘funding update & our long-term plan’ section of this newsletter. Over the same period, there was a corresponding fall in liabilities (the cost of paying benefits to members), which meant that the scheme’s funding level remained stable.

Who’s in the Fund?

The Fund closed to future accrual as of 31 December 2020. The membership summary shows the position on 31 March 2023.



Category icon for Deferred members Category icon for Pensioner members Category icon for Employer deferred members


If you were an active member of the Fund before 5 April 1997, you may have been contracted out of the State second-tier pension. You paid lower National Insurance contributions and as a result, your benefits have an underpin called your Guaranteed Minimum Pension (GMP). This was earned instead of any State second-tier pension.

You may have heard that the pension industry has been struggling with how to equalise GMPs for men and women – but this isn’t a new problem. In fact, it stretches back 25 years. We finally have potential solutions, and we are currently discussing and agreeing the most appropriate way to apply the legislation. This is a complicated subject and it won’t affect all members. There is no need for you to take any action. If you are affected, we will write to you separately. Any impact is likely to be very small.

Category icon for Deferred members Category icon for Pensioner members Category icon for Employer deferred members


Here are a few examples of what’s coming up…

  1. Pensions dashboard – an online system which will allow people with multiple pensions to view them all in one place. This has again been delayed by the government, with the launch now scheduled for 2026. We will be in a good position to share data with the project when it launches.
  2. The minimum age members can draw their pension will change from 55 to 57 in 2028. The good news is that this won’t affect Rolls-Royce UK Pension Fund members. Members of the Rolls-Royce Pension Fund section will retain their minimum pension age of 50, with all other sections retaining their minimum pension age of 55.
  3. The emphasis on Responsible Investment and all things ESG (Environmental, Social and Governance), with a current focus on the ‘S’, will continue to grow.
  4. An increasing emphasis will be placed on governance, with the Pension Schemes Act 2021 requirements being introduced. Again, this has been delayed by the government but is expected later this year. We will be required to produce its first Own Risk Assessment, which covers how well our governance systems are working and how potential risks are being managed, 12 months after the launch date.
Category icon for Deferred members Category icon for Pensioner members Category icon for Employer deferred members


The Fund website at has a lot of information about your pension.

You’ll also find help with using the website at our YouTube channel.

If you can’t find the information you’re looking for, you can contact us through your online account, by email to or by calling 01332 333335.