6th Feb 2014 11:20
LONDON (Alliance News) - Bonding materials maker Scapa Group PLC Thursday said it has now completed the merger of its UK defined benefit pension schemes, part of its efforts to reduce the costs and liabilities of the schemes.
The company had reached a deal with the pension fund trustees last March to merge the schemes into a single non-sectionalised scheme, supported by an asset backed funding structure. Completion of that merger has immediately reduced the liabilities of the schemes and cut the future costs of running them, it said.
"The merger of the UK defined benefit pension schemes continues the progress made to date in managing the group's legacy pension deficit. Specifically the simplification into a single scheme will lower the administrative burden and reduce the group's annual cash costs," Scapa Finance Director Paul Edwards said.
Scapa paid GBP2.7 million in pension payments to cover scheme expenses and to reduce the deficit, while administration costs were GBP0.4 million in the six months to September 30.
When it announced the schemes merger last March, it said the asset backed funding structure would provide an annual GBP3.75 million cash contribution to the new pension fund and remove the combined deficit of GBP54.8 million on a funding basis. The company agreed to contribute towards the new scheme's annual administration expenses, capped at GBP350,000 a year.
Scapa Group shares were up 2.9% at 124.00 pence Thursday morning.
By Steve McGrath; [email protected]; @stevemcgrath1
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