Rolls-Royce Group plc - UK Pension Schemes

20 December 2007

                  ROLLS-ROYCE GROUP PLC - UK PENSION SCHEMES                   

Rolls-Royce Group plc has previously announced that it proposed to make a lump
sum contribution of £500 million across its three main UK defined benefit
pension schemes as part of a strategy to reduce the overall deficits. The
payments were dependent on reaching agreement with the members on closure of
the schemes to new employees and with the trustees on a change of investment
strategy to significantly reduce the volatility of funding levels by achieving
progressively a better match between assets and liabilities.

The Group is pleased to announce that during 2007 the necessary agreements have
been reached, special contributions totalling £500 million have been paid and
implementation of the revised lower risk investment strategies is largely
complete across all three schemes. These changes will significantly reduce the
volatility in the future funding level of the schemes, while providing greater
confidence in returning the schemes to full solvency over an agreed timeframe.

Having played a very significant part in the discussions between the Group and
the Trustees of its largest scheme, the Rolls-Royce Pension Fund, the Chairman
of Trustees, The Rt Honourable The Lord Moore of Lower Marsh, has decided to
retire from the post with effect from the end of the year.

Lord Moore said: "I have enjoyed my ten years as Chairman of Trustees
enormously. It has been a challenging time for all involved in occupational
pensions, but I do feel that at Rolls-Royce we have seen a willingness from all
parties to engage in discussions with a determination to overcome the
challenges we have faced. I am delighted to be able to retire as Chairman of
Trustees, having reached an agreement which results in greatly improved
security for beneficiaries and much more stable and predictable pension costs
for the Group."

Lord Moore will be succeeded as Chairman of Trustees of the Rolls-Royce Pension
Fund by Paul Spencer, Treasurer of the Group between 1980 and 1986 and
subsequently UK Chief Executive of Royal and Sun Alliance, Non Executive
Director of Resolution Life and WPP Group and Chairman of National Savings and
Investments.

Simon Robertson, Chairman of Rolls-Royce, said: "I would like to extend my
special thanks to Lord Moore for his patient and professional leadership as
Chairman of the Trustees, which helped all stakeholders to reach an agreement
of benefit to the Group, its employees and its pensioners.

"I would also like to welcome Paul Spencer as Lord Moore's successor as
Chairman of the Trustees. His knowledge and business background will be of
enormous benefit to all concerned."

NOTE TO EDITORS

 1. Rolls-Royce, a world-leading provider of power systems and services for use
    on land, at sea and in the air, operates in four global markets - civil
    aerospace, defence aerospace, marine and energy.
   
 2. It continues to invest in core technologies, products, people and
    capabilities with the objective of broadening and strengthening the product
    portfolio, improving efficiency and enhancing the environmental performance
    of its products. These investments create high barriers to entry.
   
 3. The company has established strong positions within programmes that will
    shape the power-systems market for many years to come.
   
 4. The success of its products is demonstrated by rapid and substantial gains
    in market share. The company now has a total of 54,000 gas turbines in
    service worldwide and they generate a demand for high-value services
    throughout their operational lives.
   
 5. The company seeks to add value for its customers with aftermarket services
    that will enhance the performance and reliability of its products. Services
    revenues have grown by 10 per cent per annum compound over the past 10
    years.
   
 6. Rolls-Royce has a broad customer base comprising 600 airlines, 4,000
    corporate and utility aircraft and helicopter operators, 160 armed forces,
    more than 2,000 marine customers including 70 navies, and energy customers
    in 120 countries.
   
 7. Annual sales were £7.4 billion in 2006, of which 53 per cent came from
    services revenues. The firm and announced order book is £35.1 billion, of
    which aftermarket services represent 33 per cent, providing visibility of
    future levels of activity.
   
For further information:

Nicky Louth-Davies
Director of Corporate Communications
Rolls-Royce plc
Tel: [phone]
Email: [e-mail]