UK - Cable & Wireless has confirmed it is looking at further options for the "de-risking" of its UK defined benefit (DB) scheme, including a partial, rather than full, buyout.

In its full-year results for 2007, the telecoms company revealed following the full actuarial valuation of the £2bn (€2.5bn) scheme on March 31 2007, it contributed an additional £19m to make the pension fund "fully funded on an ongoing basis".

As a result, Cable & Wireless has reported an IAS19 surplus for the main UK scheme at 31 March 2008 of £375m, compared with a surplus of £43m the previous year, which it attributes to an increase in the discount rate used to value liabilities.

The firm, which also has unfunded pension liabilities in the UK of £20m, and DB schemes in a number of overseas businesses with a net IAS19 surplus of £6m, said the new funding valuation of the main UK DB scheme is based on "fully up-to-date and stronger longevity assumptions".

That said, despite the positive funding position, the company confirmed it is continuing to reduce risks in the main UK DB scheme by "rebalancing the asset portfolio towards bonds and cash". 

The fund is now structured with 24% allocated to bonds, 45% to equities, 6% to property and 25% to cash, although Cable & Wireless highlighted its implementation of a £900m swap programme to "match the fund's asset returns better to its liabilities".

Cable & Wireless also confirmed it is "in active discussions regarding options to further de-risk the pension scheme, although these options, including an insurance buyout, are not a precondition for value realisation".

That said, Tony Rice, joint group managing director and central and finance director at the firm, admitted a "full buyout is unlikely in the current market" and instead confirmed active discussions for further de-risking include the possibility of a "partial buyout".

Cable & Wireless has been contemplating the possibility of a buyout for its scheme since lat last year, and in December it confirmed to that the triennial valuation had been brought forward by a year to help the decision process. [See earlier story: C&W continues pensions buyout deliberation]

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