Smiths maintains pensions deficit recovery plan

5th Jul 2013 07:09

Engineer Smiths Group has agreed to continue its current pension scheme payments over a slightly shorter time.Smiths has two major UK pensions schemes Smiths Industries Pension Scheme (SIPS) and the TI Group Pension Scheme (TIGPS).Their recent actuarial valuations showed deficits of £535m in SIPS and £117 in TIGPS in spring last year, which Smiths said reflected the effects of the Bank of England's quantitative easing depressing discount rates.Smiths and the trustees of both schemes have agreed to maintain the current annual contributions over slightly reduced recovery periods than last agreed in 2010. Smiths has agreed to make cash contributions to SIPS of £36m a year until October 2019, previously 2020.It will make an ongoing annual investment of £24m a year, previously £25m, in index-linked gilts which will be held in an escrow account in connection with SIPS. 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. TIGPS will receive cash contributions of £16m, previously £8m, a year until April 2016. Smiths said the funding plans would be assessed at future triennial reviews and allow for contributions to be reduced in the event of improvements in the overall funding positions of the schemes. OH