It stinks. It’s full of holes. But it will give you a tasty lump sum. The company that’s put cheese in its pension plan
Twenty million kilograms of cheddar is a lot of cheese – enough to make roughly 200 million slices of cheese on toast, for one.
Yet for former milkmen and other retired workers at one of the UK’s biggest food companies, it will form a crucial part of their livelihood for the rest of their days.
Dairy Crest, the maker of Cathedral City, announced it was backing its pension fund with £60m-worth of maturing cheese.
The dairy goods maker – whose brands also include Utterly Butterly and Clover – is using the cheddar as one of a number of measures to tackle its pension deficit, which as of September stood at £84m.
The cheese is being pledged to the trustees of the fund who will, in the highly unlikely event of the fund going bust, be able to turn the cheddar into, well, cheddar by selling it.
Dairy Crest has £150m-worth of cheese maturing at any one time in its massive temperature controlled warehouse in Nuneaton, Warwickshire. The cheddar is moved there after being produced in Davidstow, Cornwall, and matures for an average of 12 months before being cut, packaged and sent out for sale.
Pension deficits in the dairy industry have been exacerbated by the fact companies are responsible for now-retired milkmen.
In 2011 milk group Uniq – formerly known as Unigate – handed 90 per cent of its shares to its pension scheme.
Dairy Crest is not the first company to turn to their own wares to back up their deficit.
“What we are seeing now is companies and trustees getting more and more creative with the assets they are using,” said pensions expert Ros Altman, who warned it is getting “harder and harder” for money to be found to shore up pension schemes.
Diageo, the drinks giant and maker of Guinness, announced in 2010 it would use millions of barrels of maturing whisky in an attempt to plug its pension deficit.
The whisky – made up of barrels from its distilleries in Scotland – is part of a 15-year deal that gives the company the option to buy it back from the fund after it has aged for three years. At the end of the 15-year period, the whisky can then be sold back to Diageo.
Other companies have used property to the same effect, such as Premier Inn-owner Whitbread, which has created a portfolio of properties occupied by the hotels chain.
“Pension schemes need money but if an employer is short of cash then it makes sense to give the scheme a claim over a physical asset instead,” said Tom McPhail, head of pensions research at financial services company Hargreaves Lansdown.
However, anyone hoping their block of cheese at the back of the fridge will, if left alone, turn into a tasty nest-egg will be disappointed to hear that the cheddar being pledged will not continue to gain in value as it gets older. Instead, the cheese allocated will be constantly revolving as it reaches its peak and is replaced by new stock.
Mature investment: Top cheeses
If you pick a good one, Britain’s favourite cheese, pictured above, gains complexity when carefully stored. Regarded by many as our top cheddar, Montgomery’s from North Cadbury, Somerset, is aged for a minimum of 12 months.
As everyone knows, Samuel Pepys buried his prized Parmesan before fleeing the Great Fire of London. Maturing is vital – usually two to three years – though producers of the world’s most famous hard cheese prefer more controlled conditions.
The Keith Richards of the cheese world, this speciality of Flanders appears amazingly gnarled and cracked in French supermarkets, But like the veteran Rolling Stone, it outshines younger rivals. Aged Mimolette is the perfect accompaniment for fine wine.
This mighty Swiss giant becomes strong and nutty as it ages for 18 months or more. There’s one drawback if you choose to invest in a whole Emmentaler. Weighing 100 kilos per round, it is the largest cheese in the world.
Make in Eastern France, the large flat discs made from unpasteurised milk command high prices but are worth it for deep, spicy flavours. Most are aged from 12-18 months.
Simon Read: It's time for a clear line on soaring mobile phone charges
You asked for it - here's your praise of banks!
Simon Read: Here are some Budget changes George Osborne could make, but I don't hold out much hope in times of austerity
How to start your own internet business
Plymouth Energy Community's solar share scheme backed by council
- 1 Is your name now 'banned' in Saudi Arabia?
- 2 Exclusive: World’s most pristine waters are polluted by US Navy human waste
- 3 Gender-specific books demean all our children. So the Independent on Sunday will no longer review anything marketed to exclude either sex
- 4 Missing Malaysia Airlines Flight MH370: Jet ‘hijacking’ began soon after take-off
- 5 'Missing Malaysia Airlines Flight MH370 plane found in Bermuda Triangle!' Viral Facebook links are profiting hackers
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
No EU referendum under Labour: Ed Miliband to reveal that vote on membership is ‘unlikely’ in next Parliament if party wins power
Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
The rise of Ukip: Study warns Labour that Eurosceptic party's electoral base now 'more working class than any of the main parties'
Europeans have ‘got whiter’ due to natural selection in past 5,000 years, scientists say
Fracking is turning the US into a bigger oil producer than Saudi Arabia
iJobs Money & Business
£35000 - £43000 per annum + Bonus and Benefits: Harrington Starr: A global lea...
£50000 - £60000 per annum: Harrington Starr: Linux Systems Administrator - UNI...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
Day In a Page
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden