UK – The £2.8bn (€4.02bn) Merchant Navy Officers Pension Fund has emerged from a court case with a decision about the size of the contribution shipping firm P&O is due to pay towards its deficit.
P&O, a member of the multi-employer pension scheme, said in a statement that it would start paying £125m this year, which it said was 18% of the scheme’s deficit.
“On the basis of the judgment given by the court, and information previously provided by the trustee of the fund, P&O expects approximately 18% of the total deficit payments to be allocated to it and its subsidiaries,” P&O said.
In its 2004 results, reported at the beginning of the month, P&O talked of a contribution bill ranging between £30m and £125m.
A spokesman for P&O said the company could be one of the largest contributors and added “a few millions pounds” in payments would be made to MNOPF each year, probably starting from the third quarter this year.
In addition, P&O has another closed pension scheme for its UK employees worth £700m that had a £200m deficit, as well as other “small” schemes which had either “no deficit to speak of” or were defined contribution.
Meanwhile a spokesman for the MNOPF confirmed that the court case, initiated by the scheme’s trustees to settle how employer members should contribute to meet the deficit, has ended up with each member being required to pay contributions.
But he added that the £125m figure provided by P&O was an estimate put forward only by the company. He also explained that the 18% share was not mentioned in court.
“MNOPF has not issued any requests of contributions directly to any employers,” he said.
He added that according to actuarial valuations made at the end of March 2003, the scheme had accumulated a £194m deficit and said no further valuation has been made since.
The trustees, aided by legal and actuarial experts, are now deciding about the size of members’ contributions. A decision is awaited by the end of the year.
Contributions would be based on the “share of liabilities that each employer has in the fund”.