Plastic manufacturer Carclo has confirmed it has not paid its final dividend of the year due to its worsening pension deficit, after issuing a warning in August.
The final dividend at 1.95 pence per share was scheduled to be paid on 7 October but has been scrapped due to the burden of its defined benefit (DB) scheme deficit.
The deficit which is calculated on an IAS 19 accounting basis has an annual recovery plan payment of £1.2m and pension scheme administration costs of £0.7m.
Although this has remained broadly unchanged in cash terms since the summer, the company said in an update published on 14 October: "Due to the materially increased IAS19 pension deficit extinguishing the company's distributable reserves, the group did not pay the recommended final dividend of 1.95 pence per share which was referred to in the results announcement made on 7 June 2016."
More broadly, Carclo's most recent accounts show the group's liabilities calculated on an IAS19 accounting basis increased from £183.6m on 22 May 2014 to £201.1m as of 31 March 2015.
The plastic manufacturer has attracted a degree of attention as figures in the industry warn about the effect of pension deficits on the performance of UK companies.
Defined benefit (DB) schemes that provide GMPs must revisit and, where necessary, top-up historic cash equivalent transfer values (CETVs) that have been calculated on an unequal basis, a landmark court judgment said last week.
Regulators must act now to impose some "proper regulation" to stop another defined benefit (DB) transfer advice disaster, saysTim Sargisson.
Opportunities for defined benefit (DB) schemes to pursue investment approaches that help repair the UK’s economy cannot stand in the way of improving member outcomes, Aegon says.
More members transferred out of defined benefit (DB) pension schemes in October after September's record lows while values were surprisingly stable, according to XPS Pensions Group's Transfer Watch.
Joanna Smith says trustees will need to accurately identify if covenant issues are short-term affordability concerns, or the start of more material deterioration.