Rolls-Royce pensions chair to step down
Paul Spencer, the chair of Derby-based Rolls-Royce’s £13bn pension fund is set to retire, with the firm announcing that finance veteran Liz Airey is set to take over the role of chair of the scheme’s board of trustees at the end of this year.
Airey is the non-executive chair of Jupiter Fund Management and a former chair of Trustees of the Unilever UK Pension Scheme.
Airey commented: “I am very excited to be joining the Rolls-Royce Trustee Board and would like to pay tribute to Paul on the terrific job he has done and the strong legacy that he leaves for members.”
Joel Griffin, Head of Pensions at Rolls-Royce, praised Spencer’s “incredible contribution” noting that he leaves the Rolls-Royce UK Pension Fund “in an exceptionally strong position, well placed to continue to protect more than 80,000 Rolls-Royce employees and pensioners who rely upon our fund throughout their retirement.”
Spencer took up the post of Chair at a time when the Rolls-Royce Pension Fund had assets of £4.5bn, but a £500m funding deficit. The trustees had recently approved a landmark change in investment strategy away from what was at the time a fairly typical profile of equities and bonds (split 70/30%) to a strategy focused on liability matching instruments together with return seeking investments (split 75/25%).
“Paul’s leadership was pivotal in overseeing the successful implementation and further development of the new liability-matching strategy which was a bold change in direction, but which has since become the benchmark for effective risk management of pension schemes,” explained Griffin. “It was crucial in protecting the funding position of Rolls-Royce’s pensions through the 2008 financial crisis and subsequent period of declining yields which have caused so many pension schemes’ funding positions to suffer.”
Spencer said: “I am enormously proud of the success of Rolls-Royce’s pension strategy. I have thoroughly enjoyed my ten years in role and am delighted to be handing over at a point where we have managed to achieve a very strong surplus of funding while at the same time have been able to deliver improved benefits for members. I am also delighted that I can hand the role of Chair of Trustees to someone with such a strong track record and experience as Liz, whom I know will do an outstanding job.”
In 2016 Rolls-Royce consolidated the main Rolls-Royce Pension Fund with three of its other UK pension schemes together to form the Rolls-Royce UK Pension Fund. At the end of September 2017, the Rolls-Royce UK Pension Fund had assets of over £13bn and estimated to have a surplus in excess of £1bn measured on the Trustee’s ongoing funding basis. The membership profile as at 31 March 2017 included 12,700 current employees, 22,000 former employees with deferred pensions, and 46,700 pensioners.
