Dewhurst Concludes Talks With Employees For Closing Pension Scheme

8th Jul 2010 07:54

LONDON (Dow Jones)--Dewhurst PLC (DWHT.LN), a manufacturer of electrical components and control equipment for industrial and commercial capital goods, and supplier of lift equipment, said Thursday it concluded a two month consultation period with employees on July 7 over its proposal to close the group's defined benefit pension scheme to future accrual. MAIN FACTS: -In September 2007 the IAS19 deficit stood at GBP3.8 million and the company agreed to make annual contributions of GBP0.5 million to clear the deficit; Despite making these extra payments there is no indication of the deficit decreasing and instead the latest IAS19 pension valuation reported in September 2009 showed assets of GBP18.3 million and liabilities of GBP24.4 million giving rise to a deficit increase from GBP3.8 million to GBP6.1 million. -The increase in the deficit is due to various factors including fluctuating asset returns and increasing life expectancy; With the cost of final salary pension provision continuing to increase the board reluctantly feel the closure of the defined benefit scheme to future accrual is now essential in order to secure the pensions already accrued, achieve future risk reduction and protect the long term future of the group. -Closing the scheme to future accrual will help limit the increase in liabilities and help the Group to fulfill its commitment to eliminate the current deficit. -Current contributing members, who from Oct. 1 will no longer build up future benefits in their defined benefit scheme, will be given the choice of building up future pension benefits in a new proposed group defined contribution scheme. -Shares on Wednesday closed at 260 pence, valuing the company at GBP8.6 million. -By Tapan Panchal, Dow Jones Newswires. Tel +44(0)207-842 9448, [email protected] (END) Dow Jones Newswires July 08, 2010 02:54 ET (06:54 GMT)