12th Dec 2006 07:00
Intimas Group PLC12 December 2006 Intimas Group plc ("the Group" or "the Company") Pension Update As highlighted in the 2006 interim report, the Group has undertaken an exerciseto address its ongoing liability to the Sherwood Group plc Retirement BenefitScheme ("the Scheme"). At the beginning of September 2006, letters were sent tovarious categories of deferred members of the Pension Scheme (members who nolonger work for a Company within the Group) to offer them the opportunity totransfer out of the Scheme into schemes of their own choice. As the Scheme isin deficit the Scheme Trustees, at the Group's request, provided details of theavailable reduced transfer values to relevant deferred members and the Groupoffered to supplement these with a cash top-up to a maximum value of their fulltransfer value. The effect of members taking this option is to reduce theGroup's ongoing liabilities to the Scheme and reduce the overall costs ofadministration. The Group's aim being to provide the relevant Scheme membershipwith a fair offer to transfer out of the Scheme whilst reducing the current FRS17 Pension deficit on the Group Balance Sheet. The Scheme membership and those subject to the Company's offer were as follows: Current Membership Number Active members and pensioners 100 Deferred members:Subject to the Company's offer 201Not Subject to the Company's offer 189 Total Scheme Membership 490 As part of this process, 124 members who are entitled to receive a pension onretirement and 77 members over age 50 who are entitled to receive a lump sumpayment on retirement, were subject to this offer. Due to changes brought aboutby the Pension tax legislation in April 2006 the Company's offer would not havebeen beneficial to the remaining 189 members under age 50 entitled to a lump sumon retirement. These remaining lump sum members represent approximately 10% ofthe estimated FRS 17 liabilities for the deferred membership. The Company is pleased to announce that, following the 30 November 2006 deadlineset by the Company for responses initial results show that 65% of deferredmembers contacted have indicated that they wish to accept the Company's offerand intend to transfer out of the Scheme. We are currently dealing with theadministrative requirements of the transfers and anticipate being able toprovide detailed numbers relating to the transferees in the end of yearannouncement. Our initial estimate would suggest that the cost to the Group offunding the Cash top-up values for the members transferring out of the Schemewould be approximately £2.5 million; the Pension Scheme will pay reducedtransfer values totalling some £5.8 million. This results in an estimatedreduction in FRS 17 liabilities of an additional £1.2m (after allowing for thetop up paid by the Company but before costs of approximately £150,000). Thiswill be treated as an exceptional profit item for the Group in this financialyear. The following table highlights the anticipated effect of the deferred memberswho have accepted the Company offer transferring out of the Scheme, as well asthe continued Company contributions to the Scheme in 2006. The Pension Schemedeficit at 30 June and 31 December 2006 do not take into account experiencegains or losses, which have still to be calculated: Pension Scheme Deficit 31 Dec 2005 30 June 2006 31 Dec 2006 £'000 £'000 £'000 Deficit at end of the period (6,734) (6,366) (2,300)Related deferred tax asset 2,020 1,910 690 Net Pension Scheme Deficit (4,714) (4,456) (1,610) The FRS 17 movements in the period to 30 June 2006 are calculated using theassumptions disclosed in the annual report for the year ended 31 December 2005.The same assumptions, together with the estimated effect of the acceptances ofthe Company's offer, have been used to estimate the position at 31 December2006. No account has been taken of any actuarial gains or losses and the figuresare unaudited. As this exercise is now approaching completion, and the size of the Scheme islikely to be much reduced, we will now enter into meaningful discussions withthe Scheme Trustees regarding long-term commitments under Scheme SpecificFunding. Michael Hobbs, Chairman, comments: "We are now a big step closer to finalising the future arrangements for theGroup's Pension Scheme. The exercise of enabling those deferred members whowish to transfer out of the Scheme to do so at a fair value has been wellreceived. Over 65% of the members contacted have taken up the opportunity totransfer to an alternative scheme. This will enable the Group to settle asignificant part of its ongoing pension liability and should assist us whennegotiating scheme specific funding with the Pension Trustees. The Group hasapproached this exercise in a very balanced and objective way and has achieved agood result for all concerned." 12 December 2006 ENQUIRIES: Intimas Group plc Tel: 0115 983 6000Michael Hobbs, ChairmanCarol Duncumb, Chief ExecutiveLaurence Ford, Finance Director College Hill Tel: 020 7457 2020Gareth David This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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