7 December 2012 – Tate & Lyle PLC
Tate & Lyle Group Pension Scheme agrees £347 million partial pensioner buy-in
Tate & Lyle PLC ("Tate & Lyle") announces that the Trustee of the Tate & Lyle Group Pension Scheme, Tate & Lyle's principal UK defined benefit scheme ("the Group Scheme") has agreed a £347 million partial pensioner buy-in of approximately 43% of total pensioner liabilities with Legal & General plc ("L&G"), which effectively hedges these liabilities in full.
Tim Lodge, Tate & Lyle’s Chief Financial Officer, said "Tate & Lyle is committed to meeting our pension commitments to existing and former colleagues. We are delighted the Group Scheme Trustee has secured this agreement with L&G, well known as a high-quality long-standing annuity provider. This transaction is an important step in our strategy to work with our schemes’ trustees and fiduciaries to reduce pension risk on a phased basis over time.”
The buy-in effectively covers around 43% of the Group Scheme’s total pensioner liabilities and represents approximately 30% of the Scheme’s total liabilities based on the ‘Technical Provisions’ assumptions agreed with the Trustee at the last triennial valuation updated for current market conditions.
The buy-in involves the purchase of a bulk annuity policy under which L&G will pay to the Trustee amounts equivalent to the benefits payable to three out of every seven of the Group Scheme’s pensioner members (“the Buy-In Members”). The premium for the annuity policy is £347 million and will be paid by the Trustee in a combination of assets and cash from the Group Scheme. It is anticipated that there will be no material impact on the Group’s cash flows or adjusted (note 1) earnings as a result of the partial buy-in.
The pension liabilities for the Buy-In Members remain with the Group Scheme, and the matching L&G annuity policy will be held within the Group Scheme as an investment of the Trustee, so the benefits of Group Scheme members are unaffected by this transaction and members will not see any changes in the way their pensions are paid.
Note 1 adjusted earnings exclude exceptional items, post-retirement benefit interest and amortisation of intangible assets acquired through business combinations
For more information contact Tate & Lyle PLC:
Mathew Wootton, Group VP, Investor and Media Relations
Tel: +44 (0) 20 7257 2110 or Mobile: +44 (0) 7500 100 320
Andrew Lorenz (FTI Consulting), Media Relations
Tel: +44 (0) 20 7269 7113 or Mobile: +44 (0) 7775 641 807
Note to editors
As at 30 September 2012, Tate & Lyle had recognised a total gross retirement benefit asset of £1,375 million and total gross liabilities of £1,592 million under the IFRS accounting rules, of which £932 million and £828 million related to the Group Scheme.