Taylor Wimpey sees £8.9m actuarial loss on DB scheme
Taylor Wimpey saw an actuarial loss on its defined benefit (DB) pension scheme of £8.9m in the year ending 31 December 2019, significantly lower than the £84.3m loss the year prior.
Its full year results - published today (26 February) - also revealed its pension deficit decreased by £48.5m following contributions made the year prior.
In 2018, a funding plan was agreed which commits the scheme to £40m per annum of deficit reduction contributions from April 2018 to December 2020, and £20m per annum for scheme expenses from February 2018 to January 2023.
Total scheme contributions and expenses were £47.1m over the course of the year, a £13m rise from 2018. Payments in 2020 are expected to be £47.1m, assuming the scheme remains less than 100% funded.
The firm's total retirement obligations were down over 2019 from £133.6m the year prior to £85m, which included a DB pension liability of £84.5m, while the IAS 19 valuation of the scheme remained in surplus at £100.5m.
Its results also showed the firm made no payments relating to GMP equalisation, unlike the year prior when it recorded a GMP equalisation charge of £16.1m.
Following its 2016 triennial valuation, the firm agreed a recovery plan with the trustees for the period to December 2020, whereby should the scheme become fully funded on the technical provisions funding basis, further contributions would be suspended and only recommence if the funding level fell below 96%.
In January 2019, the Taylor Wimpey Pension Scheme recommenced its regular contributions after its funding level fell to 94%.
Chief executive Pete Redfern said: "In 2020, we will focus on further embedding and leveraging these improvements across the business while increasing our focus and cost discipline and process simplification.
"The new year has started well, with a good level of customer demand and a clearer political outlook."
Following a £200m buy-in with Partnership in 2014, combined with around 90% liability hedging against interest rates and inflation risk exposure on the scheme's long-term, ‘self-sufficiency' basis, the underlying volatility of the scheme remains low.
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