UK – Telecoms and IT firm KCom has agreed to address a nearly £14m (€18m) pension deficit through a £10m asset-backed partnership, underwritten by a portfolio of properties.

The company said the agreement entitled its group pension funds, with combined assets of £185m, to income of £1m a year. Payments stemming from the freehold property portfolio would be linked to the consumer prices index (CPI) and capped at £10m.

A statement by the company’s management added: “In recognition of that value and the security provided to the schemes by the income stream, the group has agreed with the trustees that no deficit repair contributions will be due in respect of the financial year ending 31 March 2014.”

The company agreed deficit contributions of £6.9m per annum in 2010 and brought forward by a year its payment scheduled for 2013, making an additional one-off contribution of £3.1m at the end of March last year.

KCom recently closed its defined benefit funds to new accrual, estimating that this would reduce liabilities by almost £3m.

However, the payment was unable to close the group’s deficit, which at the end of March last year stood at £13.8m. The company’s deficit has fluctuated noticeably over the last five years, standing at £61m at the end of 2009’s financial year, and falling over the following two years as obligations fell and assets recovered in value.

The company said that it would continue to work closely with scheme trustees and consider additional funding approaches, and added that further information about scheme deficits would be published when it released its 2013 results over the summer.

Meanwhile, the Local Authority Pension Fund Forum (LAPFF) has announced two new members, with the schemes for Staffordshire and London’s borough of Greenwich joining the organisation.

The LAPFF’s chair Kieran Quinn, also chair of the Greater Manchester Pension Fund, noted that the majority of local authority funds were now members of the body.

“Our profile has never been higher and our ability to influence events has never been greater with each new member bringing its individual view to our discussions,” he said.

A spokesman for Staffordshire added that it hoped to increase its power as shareholders by joining the forum.

The forum recently backed the annual publication of executive pay ratios in an attempt to control excessive increases, noting that the growing gap between the executive pay and a company’s workforce risked undermining morale and motivation.

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