AG BARR has finalised a deal with life insurance company Canada Life that is designed to protect the soft drinks maker from future volatility in its final salary pension scheme.
In the year to July 2016 the deficit on the AG Barr (2008) Pension and Life Assurance Scheme almost doubled from £13.7 million to £25m, meaning the amount the company will be required to pay into the scheme each year could rise significantly.
Earlier this year the company stopped employees from building up any further benefits in the scheme as a means of managing the amount it will have to put into the scheme in future.
Having purchased a so-called bulk annuity from Canada Life, the company is now no longer responsible for funding the pensions of 50 per cent of the scheme’s members.
In return for a £35m premium that was funded through low-risk bonds held in the pension fund, Canada Life will pay cash to the pension scheme to exactly match the liabilities of those insured.
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