10th Jan 2007 11:30
Smiths News PLC10 January 2007 SMITHS NEWS ANNOUNCES REVIEW OF DEFINED BENEFIT PENSION SCHEME Smiths News, the UK's leading newspaper and magazine distributor, has written toemployees that are contributory members of the Final Salary WH Smith PensionTrust scheme (a Defined Benefit (DB) or Final Salary pension scheme) proposingchanges to the scheme. The DB scheme was closed to new members in 1995. The proposals being put forwardby the company and which have been discussed with the Trustees, would result inthe scheme now being closed to existing members. If the current proposals areimplemented these members would be entitled to similar defined contributionpensions benefits to those available to employees that have joined the companysince the Final Salary scheme was closed to new members. Closure of the DB scheme to existing members affects only future contributions.It does not change the benefits that have already been earned through membershipof the scheme, nor does it affect members who have left the company or haveretired. Commenting on the proposed changes, Glenn Leech, HR Director said:"The long term uncertainty over the cost of maintaining a final salary pensionscheme coupled with low investment returns and the increase in life expectancymean that continuing to support a final salary pension scheme is becomingincreasingly difficult for companies. Therefore we are today making proposals tomembers of the scheme which we believe to be in the long-term interest of thecompany and our employees." Contacts For more information please call: Kate Holgate, Brunswick Group LLP 020 7404 5959 Notes to Editors Smiths News demerged from WH Smith on 31 August 2006. Smiths News is the UK'sleading newspaper and magazine wholesaler delivering over 60 millionpublications to 22,000 retailers every week. Approximately 700 of Smiths News' 4,300 employees are members of the effectedfinal salary scheme. The company will now enter a consultation period regarding these proposals. At demerger the Pension Trust was split into two sections: one for Smiths Newsand one for WH Smith. This involved segregating the assets and liabilities ofthe Pension Trust to reflect the membership of the two businesses. Upon thedemerger, as agreed with the Trustees of the WH Smith Pension Trust a £25million payment was made into the Smiths News section of the scheme. Upon sectionalisation and after taking into account the £25m one-off payment,Smiths News net pensions deficit as at 1 September 2006 would have been £17m and£27m on a IAS 19 basis and an ongoing basis, respectively, net of relateddeferred tax. In addition to the one-off payment Smiths News also agreed with the Trustees tomake ongoing pension funding payments of circa £5m in total each year for fiveyears. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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