Smiths deal tackles pensions deficits

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BRITISH engineering company Smiths Group said it had reached an agreement with two of its major UK pension schemes, under which it would maintain its current annual contributions over slightly reduced recovery periods.

The agreements followed a valuation of the schemes, which showed that Smiths Industries Pension Scheme (SIPS) had a deficit of £535m and the TI Group Pension Scheme (TIGPS) had a deficit of £117m.

Under the terms, SIPS will continue to receive a cash contribution of £36m annually until October 2019.

The group’s current contribution of an ongoing annual investment of £24m in index-linked gilts held in an escrow account in connection with SIPS will also continue.

Cash contributions to TIGPS of £16m a year until April 2016 will be maintained, Smiths Group said.

In common with a number of UK companies, Smiths Group has been weighed down by its pension liabilities. The company had a net pension deficit of £382m on January 31.