Smiths agrees pension deficit reduction plan

7th Jul 2010 07:34

Engineer Smiths has agreed a ten-year plan with its trustees to reduce the £655m deficit in its two main pension funds.There has already been a significant uptick in the value of the funds, Smiths says, as the valuations were taking in March and April 2009 at the worst of the credit crunch.Going forward, it will now increase the annual contribution into the Smiths Industries Pension Scheme (SIPS) from £33m to £36m. It will also immediately put £25m into a index-linked gilts escrow fund to be followed by a further £216m in monthly payments of £2m spread over 9 years.Smiths will also put £50m cash into the TI pension scheme with further biannual instalments of £8m thereafter.The funding plans allow for contributions to be reduced in the event of improvements in the overall funding positions of the schemes following future triennial valuations, Smiths added.The medical equipment group has already closing the defined benefit pension plans in the UK and US and capped its obligations for post-retirement healthcare benefits.In April, SIPS had around 27,000 members, including 14,000 deferred members and 13,000 pensioners and TIGPS had around 36,000 members, including 16,500 deferred members and 19,500 pensioners.