UK - Barratt Developments has posted a £7.1m (US$11.6m) gain in income as a result of closing its defined benefit scheme to current employees.
The housebuilder's final results for the year to June 30 - which revealed a pre-tax loss of £678.9m and were accompanied by an announcement to raise £720.5m in a rights issue - said the curtailment gain was the result of freezing its DB scheme and the associated removal of the link between accrued benefits and future salary increases and redundancies made during the year.
The firm closed the Barratt Group Pension & Life Assurance Scheme - which was already closed to new entrants - to future accrual by existing members from June 30 after a consultation process with the trustees and members of the scheme.
The scheme had liabilities of £201.9m and assets of £170.4m - representing a deficit of £31.5m - at June 30.
This comes just weeks after Redrow - a competitor of Barratt - announced it had capped increases in pensionable salary for active members of the defined benefit section of its pension scheme.
The building firm said it had capped increases in pensionable salary to the lower of base salary increases, increases in inflation, or 2.5% from July 1.
It said this action had enabled the firm to keep its DB scheme open to future accrual for current members whilst ensuring costs were appropriately controlled.
The firm had already closed the DB section of its scheme to new members.
In a statement, the firm said: "The group recognised that, whilst the defined benefit pension arrangements were viewed by members as an attractive and valuable benefit, increasing costs arising from longer life expectancy, falling interest rates and poor returns on assets potentially made future funding unsustainable."
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