Reuters moves to cut its pension deficit
Thursday 25 May 2006
The news and information group Reuters became the latest large company to commit to wiping out its domestic pension deficit yesterday, pledging to pay £230m into its two UK schemes over the next two years.
The two schemes have a combined deficit of about £265m, according to the most recently published figures. Reuters saidit plans to make two cash injections, which will eliminate most of the deficit - £188m this year, and a further £42m next year. Once the payments have been made, it will be left with a deficit of about £35m in the UK, and a hole of about £32m in its overseas pension plans.
In its statement yesterday, the group said the payments would not impact the funding of its current "Reuters Core Plus" growth strategy, or its ongoing share buyback programme.
The company said it had agreed to "de-risk the investment strategy of the plans", reducing its exposure to future risks from market movements.
According to Reuters' latest report and accounts, about 55 per cent of the assets in its UK plans are invested in equities, with 36 per cent in bonds, 7 per cent in property and 2 per cent in cash.
It added that its payments into the pension funds would also provide an increase in payouts for existing pensioners.
Shares in Reuters fell 7p to close at 376.75p.
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