Courtaulds resurrects 74m pounds from pension fund

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The Independent Online
COURTAULDS Textiles is using what it calls 'dead money' in the company's pension fund. An actuarial valuation has identified a pounds 74m pension fund surplus.

The company will net pounds 19m in cash. The scheme's members, pensioners and deferred pensioners, will receive pounds 15m in additional benefits. Some pounds 16m will remain as surplus. And the Inland Revenue will take pounds 12m.

Martin Taylor, chief executive, said the surplus had arisen from 'excessive contributions made by the company, particularly during the early 1980s'.

The City reacted favourably, pushing shares in the company, which was demerged from Courtaulds in 1990, up 10p to 554p.

Courtaulds itself is in the process of valuing its fund. Michael Pragnell, finance director, said the company had a pounds 210m surplus in 1989 'which should have grown'.

However, he said that there were material differences between what the chemicals company could do and the actions announced yesterday by the textiles group.

When the two were demerged, Courtaulds Textiles started with a clean sheet - no pensioners - whereas Courtaulds had more than 20,000 pensioners. 'Our surplus to liability is unlikely to be as great . . . but we expect to take some action,' Mr Pragnell said.

The textiles company's surplus was 155 per cent of liabilities, or 55 per cent over-funded. 'It's a question of how many gold pieces you keep under the bed,' Mr Taylor said, explaining the company's moves.

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