RAC Pension Scheme

RAC Pension Scheme

The RAC (2003) Pension Scheme was established to hold the final salary pension obligations of the roadside assistance group, which traces its operating roots to 1897. After Aviva plc acquired RAC in 2005, the scheme became one of several legacy pension vehicles sponsored by the insurer, sitting alongside the Aviva Staff Pension Scheme and the Friends Provident Pension Scheme under a shared trustee governance framework chaired by Brian Bussell. The scheme's investment strategy has pivoted decisively toward liability-hedging and illiquid assets. The plan holds a UK commercial real estate portfolio and entered into a longevity swap structure covering UK and French liabilities to mitigate member-life-expectancy risk. The signature deployment, however, closed in 2023 when the trustees purchased a bulk annuity from Aviva — effectively an insurance contract — covering £1.3 billion of liabilities for roughly 19,000 members, moving the scheme into a fully insured end-state. The buy-in transaction dominates the scheme's current posture: it transfers asset-management and longevity risk to Aviva's balance sheet while the trustees retain oversight of the residual illiquid holdings, principally the real estate portfolio. Board-level decisions are made through RAC Pension Trustees Limited, with Bussell serving simultaneously as chair of the Aviva Staff Pension Trustee Ltd, aligning governance across multiple UK Aviva-sponsored schemes. The scheme participates in industry policy work through the Pensions and Lifetime Savings Association. The scheme's architecture represents the final chapter for many UK single-employer pension plans — a run-off entity that has replaced active investment risk with an insurance wrapper. Its remaining function is custodial: managing the legacy real estate exposures and ensuring the bulk annuity contract performs as written, a posture that makes it a yield-focused administrator rather than an active allocator.