High street bakery chain Greggs saw a £19m increase in its defined benefit (DB) scheme deficit during 2016 on the back of falling corporate bond yields.
As of 31 December, the final salary scheme recorded a total deficit of £22.9m on the IAS 19 accounting measure, compared to just £3.9m on 2 January 2016.
The DB fund closed to future accrual in 2008, with all remaining active members moved into a defined contribution (DC) scheme.
In its preliminary annual accounts, published 28 February, the company said deteriorating bond yields had lowered its discount rate.
"Despite appreciation of the scheme's assets in 2016, the present value of the expected liabilities has risen considerably as a result of significant falls in corporate bond yields, which are used to determine the discount rate applied," it wrote.
It comes after the scheme's latest triennial valuation, conducted in April 2014, showed a funding surplus. The scheme will begin its next triennial valuation this April.
A Greggs spokesperson said: "The latest accounting position reflects the current level of bond yields. There are no concerns about the long term funding of the pension scheme and we continue to work with the trustees over the longer term to ensure that the scheme's obligations are met. The scheme is due for its triennial actuarial valuation in April 2017, following which the trustees and the Company will discuss the resultant position."
Nearly every trustee is confident of the next stage in their scheme’s strategy, despite almost an equal number being forced to consider replacing plans within the prior 12 months, according to research by Barnett Waddingham.
Companies could be overstating their pension liabilities by up to £60bn due to their life expectancy assumptions, according to XPS Pensions Group.
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.