UK roundup: Balfour Beatty, PIE, Henderson Group, Gartmore
UK - Infrastructure group Balfour Beatty has seen its pension deficit fall in the first six months of the year, following the payment of deficit-reduction contribution payments, as well as a de-risking exercise.
The UK firm said February saw the successful completion of a Pension Increase Exercise (PIE) - whereby pensioners forgo any future inflation-linked benefits to receive higher but non-indexed payments - with more than 500 beneficiaries agreeing to the exchange.
The company’s half-yearly report, covering the six months to June, said: “The offer closed in February 2012, resulting in an additional £2m (€2.5m) reduction to the half-year pension obligation and a consequential net past service cost credit of £2m in the first half of 2012.”
According to accounts, the company’s overall pension deficit stood at £163m at the end of June, with Balfour Beatty saying it “benefitted” from deficit-reduction payments of £31m.
The report said the unaudited results for the Balfour Beatty Pension Fund (BBPF) for the first half of the year stood at 5.2%, on par with 2011’s overall results but down over the same period last year.
Meanwhile, Henderson Group has lamented the “disappointing” institutional outflows suffered in the six months to June, saying many of its clients were re-balancing portfolios in the wake of pension buy-in agreements.
In its half-yearly report, the parent company of Henderson Global Investors said: “Clients continue to rebalance their portfolios either into global mandates or where they have been subject to pension buyout arrangements.
“Given the strong performance we’ve delivered to institutional clients, reflected in both the client returns as well the performance fees we earned in the period, it is clearly a disappointing position to be in.”
It said the end of June still saw pre-existing commitments result in a positive pipeline, but that “uncertain” times meant it would be unable to predict if the net positive position would continue for the rest of the year.
The company also said its acquisition of Gartmore had seen its overall pension costs increase year-on-year, but that “cost reduction actions” taken last year helped offset this rise.
Following its acquisition of Gartmore, Henderson agreed a £160m buy-in with the Pension Insurance Corporation, although the deal had been under consideration since before Gartmore finalised the terms of the sale.