Smiths Group, TI Pension Scheme Agree 10-Year Funding Plans

7th Jul 2010 07:17

LONDON (Dow Jones)--Smiths Group Plc (SMIN.LN), a global technology company, announced Wednesday that the company and the Trustees of its two major U.K. pension schemes - Smiths Industries Pension Scheme or SIPS and the TI Group Pension Scheme or TIGPS - have agreed 10-year funding plans. MAIN FACTS: -These funding plans follow completion of the triennial actuarial valuations of the schemes at Mar. 31, 2009 and April 5, 2009 respectively which showed deficits of GBP545 million in SIPS and GBP110 million in TIGPS at those dates. -These reflect both prudent assumptions and the depressed market value of assets at the time. -There has since been a substantial increase in asset values and the funding position has improved accordingly, which is reflected by the contingent nature of a significant element of the agreed funding plans. -The plans require the following separate contributions from Smiths Group: -Cash contributions to SIPS of GBP36 million a year for 10 years, subject to subsequent triennial valuations. -This compares with GBP33 million annual contributions made in respect of the previous triennial valuation. -An initial investment of GBP25 million in index-linked gilts which will be held in an escrow account with a further ongoing monthly investment of GBP2 million for nine years commencing July 2011. -The escrow account will remain a company asset until 2020 subject to the funding position at that time or may revert to the company sooner should there be a surplus at an intervening triennial review. -This provides a contingent funding commitment to SIPS without locking the investment into the Scheme should its funding position improve. -A conditional cash contribution to TIGPS of up to GBP50 million payable in May 2012, with further biannual installments of GBP8 million thereafter. -These payments may not be made, or paid only in part, subject to the funding position of the Scheme in the six months ending Mar. 31, 2012. -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. -The use of the escrow account for SIPS ensures no material change to net cash outflows to the U.K. pension schemes prior to the date of the next triennial review. -Shares closed Tuesday at XX pence. -By Zechariah Hemans, Dow Jones Newswires; 44-20-7842-9411; [email protected] (END) Dow Jones Newswires July 07, 2010 02:17 ET (06:17 GMT)