Balfour Beatty to plug £375 million pension hole
Agreement reached with pension fund trustees to cover deficit within eight years
By CFOWorld.co.uk | CFO UK | Published 11:43, 26 November 10
Balfour Beatty will make a one-off payment of £40 million towards its £375 million pension fund deficit by the end of the year, the group said on Friday.
The infrastructure and construction group said on Friday that it has come to an agreement with the trustees of the Balfour Beatty pension fund to cover its £375 million pension deficit over an eight year period.
Under the terms of the agreement for the for the triennial funding recovery plan, Balfour Beatty will make a one-off payment of £40 million (around £29 million after tax) by 31 December, followed by annual contributions of £48 million (around £35 million after tax) from 1 April 2011.
The company has been increasing its contributions of £36 million on an annualised basis since 1 April 2010 in the expectation of reaching an agreement.
The agreement also stipulates that the annual deficit contributions will increase every year in line with the consumer prices index up to a maximum of 5 percent in addition to 50 percent of the percentage increase in the company’s dividend over and above that rate.
The share price was up 1.1 percent on Friday morning.
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