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Home Investment Defined Benefit
Professional Pensions | 09 Feb 2012 | 11:35
Categories: Defined Benefit
Topics: Diageo, Deficits, Scheme contributions, Asset-backed contributions, Cpi
Falling discount rates have pushed Diageo’s pension deficit up by almost a quarter to more than £1bn.
The firm's half year results, published today, revealed the deficit for its UK and Ireland schemes rose from £838m in June to £1,038m by the end of December despite falling inflation assumptions and cash contributions of £67m.
The company - which owns the Guinness, Johnnie Walker and Baileys brands - said it expected to make additional contributions of £120m over the next six months.
It also revealed that it expected deficit to fall by approximately £100m over this period after changes to the way in which future benefits are calculated.
A company spokesman said the company had switched from using the retail prices index to the consumer prices index for uprating the benefits of deferred members and had informed all members in January.
In 2010 Diageo established a 15-year pensions funding partnership which holds barrels of maturing whisky and was expected to provide the scheme with an income of approximately £25m a year. The deficit at the time stood at £862m (PP Online, 1 July, 2010).
Categories: Defined Benefit
Topics: Diageo, Deficits, Scheme contributions, Asset-backed contributions, Cpi
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