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
PTL has appointed Karein Davie as a client director in its Birmingham office.
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The number of DB pension scheme trustees targeting a buyout with an insurer has increased significantly in the past five years, latest research from Willis Towers Watson shows.