UK - Drinks giant Allied Domecq has come under fire from a City analyst for holding too many equities in its pension schemes.
The firm – famous for its Courvoisier, Tia Maria and Teachers brands – has seen the combined FRS17 deficit on its £1.5bn UK and £327m overseas schemes rise to £480m by the end of August.
Last year, the schemes had a combined deficit of £35m and were worth £1.8bn and £417m, respectively.
The schemes are currently 58.7% invested in equities, 30.5% in bonds, and 10.8% in property and other classes.
The UK scheme – which is closed to new members – is mature, and has approximately 1900 active, 36,000 deferred and 25,000 pensioner members.
The analyst said: “Allied Domecq is one of the first companies to show the impact of the steep falls in the equity market.
“Others will follow. They have a high equity holding, given the maturity of the scheme, so some of this deficit is self inflicted.”
The firm’s preliminary results for 2002 blame volatile equity markets for its increased deficit, but added that the schemes are well funded and that it does not anticipate having to increase contributions to the funds.
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