UK - Shipping firm Royal P&O Nedlloyd says it is to start paying its share of deficit to the industry-wide Merchant Navy Officers' Pension Fund this summer.
The move follows a court case brought by fund trustees to allocate deficit payments among the scheme’s employers.
Last March the court ruled that all current and historic employers should contribute towards the benefits accrued by their employees. P&O Nedlloyd said its share of the actuarial deficit was estimated to be about $20m (€16.2m).
The company, which published its first-half results today, said the deficit would be collected over a ten-year period commencing this summer.
“The judge determined that the trustee has indicated that the company’s actual contribution can only be determined once the trustee has decided how the deficiency is to be met,” the firm said. The MNOPF declined to comment.
The company added it is currently treating the share of the assets and liabilities of the MNOPF as a defined contribution scheme for accounting purposes.
“It is estimated that if the MNOPF were to be accounted for as a defined benefit scheme in accordance with IAS19 principles, the group's share of the deficit would be approximately $73m,” it said.
In April this year P&O Nedlloyd withdrew from the P&O Pension Scheme in the UK to establish its own defined benefit scheme for staff who were previously members of the P&O Pension Scheme.
As part of the arrangements it made a cash contribution of $135m to cover for the past service liabilities remaining with the P&O Pension Scheme as well as cash contribution of $67m towards the actuarial deficit of the new P&O Nedlloyd scheme.
“Following these payments, the deficit of the new pension scheme as at 30 June 2005 is estimated to be approximately $76m under IAS19,” the company said.