UK - telent's net pension scheme deficit has been reduced by £51m in the past six months, the company's latest results have revealed.
The deficit at 30 September amounted to £14m, comprising of a £48m surplus in its UK pension plan and liabilities of £62m relating to unfunded legacy pension liabilities retained in its German business.
telent released the second half results following the takeover by Pension Corporation’s Co-Investment No.5 Limited Partnership (CILP) last week.
The single largest movement in its cash balances during the last six months related to the transfer of the majority of the cash held in the escrow account, owned by telent but secured in favour of the trustees of the UK pension plan, from cash deposits to primarily UK sterling bond investments.
The escrow account was created when most of the former Marconi business was sold in 2006. As part of the deal it was agreed that the money could be drawn on by the pension trustees if the scheme fell into deficit, or could be given back to the employer if the scheme was deemed to be more than 105% in surplus.
Pension Corporation, which will be able to access the escrow account if such a surplus is achieved, faced much opposition to its takeover of telent. The Pensions Regulator appointed three independent trustees to the pension board, after concerns were raised by trustees of the pension fund, and union Unite claimed the security of workers’ pensions was at risk if the deal went ahead.
A spokesperson for Pensions Corporation said: “Over the next weeks and months Pension Corporation will be working with the trustees.”
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