Schroders to pay E84m to top up pension
UK – Schroders is to pay up to 56.7 million pounds (84 million euros) in extra contributions into its main UK pension scheme.
The company said in its new annual report that it would pay an extra 370,000 pounds a month into the 353.7 million-pound Schroders Retirement Benefits Scheme until June 2015 – 56.7 million pounds in total
It said the most recent triennial valuation of the scheme, carried out as at January 1 2003 by Hewitt Bacon & Woodrow, found the assets of the scheme represented 88% of the scheme’s liabilities.
“As a result of discussions between the trustees and company following the valuation, the company has agreed to increase its contributions to 30.8% of capped salaries to cover the accrual of ongoing benefits.
“In addition, the company agreed to make additional contributions of 375,000 pounds per month from January 2003 until June 2015 to extinguish the past service deficit in the UK scheme.”
The 200 year-old company said the contributions would be reviewed at the next formal valuation of the UK scheme, due as at January 1 2006.
The company also said that the shift away from balanced to specialist mandates cost it 3.7 billion pounds in net outflows in 2003.
“Overall net outflows of institutional funds were 4.3 billion pounds, down from 5.4 billion in 2002,” the company said in the report. “The net outflow was due in part to underperformance in some asset classes but, as importantly, to restructuring by clients in the UK and elsewhere from balanced and multi-asset mandates to specialist mandates.”
“The latter was the major factor underlying a net outflow in the UK of 3.7 billion pounds.” At the end of the year it had 71.2 billion pounds in institutional assets under management.
Total funds under management rose by 12.1 billion pounds to 98.3 billion pounds at the end of December 2003. “New and existing clients contributed 21.4 billion pounds, of which 12.2 billion was from retail and private banking clients.”
Overall asset management net revenue margins rise to 46 basis points from 44 basis points.