UK – The UK’s Premier Foods has seen its group-wide pension deficit fall by more than £70m (€81m) in the first half of the year, partially assisted by a change to the discount rate applied by the schemes.
The group reported a gross deficit of £394.7m under IAS 19 accounting rules across both its pension schemes, although improvements were largely confined to the RHM Pension Scheme, acquired when the company bought the rival in 2007.
“The deficit decrease principally reflects a positive movement in the RHM deficit of £83.5m from £131.6m to £48.1m,” Premier’s half-yearly report said.
“Asset values in the RHM scheme increased by £55.3m due to an increase in the value of property, absolute return and swap assets, while liabilities decreased by £28.2m, due to an increase in the discount rate of 0.25% since 31 December 2012.”
Both the RHM fund and the Premier Foods Pension Scheme (PFPS) increased discount rates to 4.7% at the end of June, on par with the rate applied 12 months prior.
Despite the significantly smaller deficit – £48.1m compared with £346m – the RHM fund accounted for the majority of combined pension assets, with PFPS reporting the value of its assets as £530m at the end of June.
In comparison, RHM accounted for £2.7bn of the £3.2bn in assets.
The company also reported lower deficit reduction payments of £3.4m after it struck an agreement with trustees in 2012 that allowed Premier to refinance its debt.
“Following the refinancing package concluded with the banking syndicate, swap counterparties and pension schemes in March 2012, pension deficit contribution payments were suspended from March 2012 to December 2013; deficit contribution payments resume from January 2014,” the report noted.
In other news, fiduciary manager SEI has claimed that UK pension funds are dissatisfied with their own governance structures.
Citing a poll it conducted, the firm said 56% of respondents were unhappy their current governance arrangements did not allow them to react to market changes.
Nearly one-third of respondents also said they did not think their investment consultant offered good value for money.
SEI said: “For some, there is a perceived lack of transparency around the costs associated with traditional investment consultants who often charge separately for investment reviews, manager changes and ongoing support, and who are not fully accountable to the scheme.”
Nonetheless, 21% said it had kept the same investment consultant employed for more than a decade.
The poll questioned 41 pension professionals, although the total asset under management figure for which they were responsible was not disclosed.