UK - British American Tobacco has reaffirmed its faith in final salary schemes even though it revealed a massive pensions deficit in its accounts.
The company reported a net FRS17 liability on its pension schemes of £470m in the year to December 31. But BAT said £430m related to an unfunded German scheme where other pledged assets will cover liabilities, bringing the real deficit down to £40m.
Its UK pension scheme – the £1.46bn British American Tobacco Pension Fund - remains in surplus and a company spokesman said the firm would not be following the herd in closing its schemes to new members.
As at December 31 the tobacco company’s UK pension fund had 59% of its assets in equities, 37% in bonds, 2% in property and 2% in other investments. At that date the scheme had 2850 active, 4500 deferred and 7500 pensioner members.
• Balfour Beatty's annual report and accounts reveal a net FRS17 surplus in its schemes of £37m.
The Balfour Beatty Pension Fund valued at £1.37bn has around 38% of its assets invested in equity, 58% in bonds and 4% in property and other assets.
The scheme is very mature having around 8000 active, 18000 deferred and 15,000 pensioner members.
By Jonathan Stapleton
This week's edition of Professional Pensions is out now
Collective defined contribution (CDC) schemes will need clear and transparent governance frameworks, as well as effective communication strategies, to be a success, the Work and Pensions Committee (WPC) has been told.
The aviation sector's constant evaluation of mistakes to improve safety should be applied to defined benefit schemes, as too many are making the same mistakes again and again, latest research shows.
A month of strikes are due to hit 64 universities from tomorrow over major reforms to the Universities Superannuation Scheme (USS).