Wincanton, a leading provider of supply chain solutions in the UK & Ireland, has reached an agreement with the Trustee of the Wincanton Pension Scheme (the ‘Scheme’) on the 2017 triennial valuation (the ‘2017 valuation’) and recovery plan.
The deficit recovery plan will run to 31st of March 2027 and the annual deficit contributions include: £17.3 million pa (£18 million pa gross less pension administration expenses incurred by the Company) from April 2018 through to March 2021, increasing annually from April 2019 in line with the Retail Prices Index; and £24.3 million pa (£25 million pa gross less pension administration expenses incurred by the Company) from April 2021 to March 2027, increasing annually from April 2022 in line with the Retail Prices Index.
In addition, the company will make a one-off lump-sum contribution of £15 million, which will be paid in August 2018, funded by the sale proceeds of an underutilised freehold property in Corby that completed in June 2018.
The current proforma actuarial deficit, after allowing for contributions made to date and including the one-off lump sum amount, is estimated at £190 million. The actuarial deficit at 31 March 2017 was £221 million. The position calculated in accordance with the IAS19 Accounting Standards showed a significantly smaller deficit of £76 million as at 31 March 2017 and £47 million as at 31 March 2018, reflecting the very different methodology prescribed by IAS19.
Wincanton has also agreed other provisions with the Scheme, including additional payments to the Scheme on a partial (50%) matching basis if distributions to shareholders (dividends and share-buy-backs) grow year-on-year in excess of 10% and on a full matching basis if distributions grow year-on-year in excess of 15%. The matching will only be in relation to the distribution amounts above the thresholds.
“I am pleased that we have reached an agreement with the Trustee over the pension fund valuation and recovery plan that is both fair and affordable. It allows us to move forward with confidence and certainty. Importantly, we retain our ability to invest in the business and to continue our progressive dividend policy,” commented Adrian Colman, Wincanton CEO.