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Whisky and mushroom firms plant buyout future

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  • Whisky and mushroom firms plant buyout future

UK -  Morrison Bowmore Distillers has agreed terms with Paternoster for a £30m (€38m) phased buyout of its pension scheme.

The firm is one of Scotland's oldest Scotch whisky distilleries and part of the Japanese Suntory Group, and this deal means scheme members immediately benefit from the security of an insurance policy, while the company is able to manage business costs more efficiently by arranging to pay off the deficit over an extended period.

PricewaterhouseCoopers advised the trustees of scheme, and members have already been notified about the changes, which include the transfer ofthe scheme's assets to Paternoster.
 
David Wilson, trustee of the Morrison Bowmore Distillers Limited Pension Fund, said: "Paternoster was able to come up with a solution tailored to our circumstances. This flexibility, together with their evident experience of having done this before convinced us that they were the best option." 
 
Mike Keiller, chief executive of Morrison Bowmore Distillers, confirmed the company had reached an agreement with Paternoster, which secures member benefits, and allows the company to "benefit from a flexible and affordable contribution schedule which eliminates risk".
 
Mark Wood, chief executive of Paternoster, added: The trustees acted in the best interests of their members by taking advantage of the market conditions to secure their member benefits in full."

Meanwhile, Blue Prince Mushrooms has used an e-auction to buyout its £6.5m pension scheme with Legal & General, after the scheme started to wind-up once its sponsoring employer ceased trading.

Lane Clark & Peacock (LCP), the actuarial and pension consultancy which oversaw the e-auction, claimed the trustees of the scheme decided to adopt a buyout approach as they wanted to "ensure that all members' benefits could be secured in full with an insurer and to minimise the company top-up required".

The board of trustees was assisted in its decision by Capital Cranfield Trustees, who oversaw the buyout process, as the £6.5m pension scheme had already begun winding-up in 1994 as the sponsoring employer had ceased trading, although it claimed it did not need to apply to Financial Assistance Scheme.

Nick Curry, partner at LCP, said: "This is a tremendous result for the trustees and pension scheme members who were facing an uncertain financial future due to the company's position. The e-auction helped to deliver a very successful outcome and enhanced the negotiations with insurers."

Adrian Dawes, trustee at Blue Prince Mushrooms, also said: "Our e-auction provided a transparent and auditable process that ran quickly and efficiently and demonstrated best value."

Simon Gadd, managing director of annuities at L&G, added: "E-auctions are becoming more common in our marketplace. If the circumstances are appropriate and when they are as well run, as in this case, there can be benefits for all parties. We were able to offer Blue Prince Mushrooms an attractive proposition for the company, the trustees and the scheme members."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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