UK - Drinks firm Diageo is to pump £100m into its ailing pension system as part of a seven-year plan to rid its £653m deficit.
The company said it would conduct a valuation of the deficit later this week, before making the initial annual cash contribution.
Diageo announced it would also make a cash contribution in respect of annual benefits awarded to active members, which is expected to be £50m in the year ending 30 June, 2006.
The agreed framework provides for a reassessment of the funding position on a three-yearly basis and allows for appropriate adjustments in company contributions in line with the deficit at that time, said Diageo chief executive Paul Walsh.
'This funding framework, together with changes we have made to the pension scheme, demonstrate Diageo’s commitment to provide a high standard of employment benefits,” he said.
“It follows the sale of our shares in General Mills and our full exit from Burger King and provides further clarity in relation to Diageo’s balance sheet.”
Diageo said none of the arrangements were expected to change the company’s previously announced share buy back programme.
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