Rolls-Royce agrees pension fund longevity swap

28 November 2011

                Rolls-Royce agrees pension fund longevity swap                 

Rolls-Royce and the Trustees of the Rolls-Royce Pension Fund have agreed a
longevity swap that will give additional security to all members of the
company's final salary pension scheme. The contract with Deutsche Bank reduces
the risk on approximately £3bn of the fund's liabilities. The cost of this
transaction will be borne by the pension fund and will have no material effect
on the funding arrangements. Around 37,000 pensioners are covered by this
agreement.

Andrew Shilston, Rolls-Royce Finance Director, said: "We have made sure that as
our pensioners live longer in retirement we have made proper provision for
them. This is the latest in a series of measures we have taken to achieve
greater certainty for our future funding requirements".

Paul Spencer CBE, Chairman of the Rolls-Royce pension fund trustees said: "We
have been working closely with Rolls-Royce for some years to enhance the
security of all our members' benefits. This is another important step forward."

Notes to Editors:

1. Under the longevity swap the Trustees and the Bank have agreed an average
life expectancy. If pensioners live longer than expected the Bank will make
payments to the Fund to offset the additional cost of paying pensions. If the
reverse applies the cost of paying pensions will be reduced but the Fund will
be required to make payments to the Bank. This arrangement enables future
liabilities to be predicted with more certainty.

2. The Trustees were advised by Aon Hewitt (as lead adviser), Linklaters (as
legal adviser) and Mercer (as investment adviser). State Street will act as
credit support services manager and custodian.

For further information, please contact:

Investor relations:

Mark Alflatt
Director of Financial Communications
Rolls-Royce Holdings plc
Tel: [phone]
E: [e-mail]

Media relations:

Josh Rosenstock
Director of External Communications
Rolls-Royce Holdings plc
Tel: [phone]
E: [e-mail]

www.Rolls-Royce.com