WHISKY producer Chivas Brothers has become the latest company to tackle the hole in its final salary pension fund by ploughing in a £60.5 million lump sum and securing scheme funding against company properties.
Accounts filed with Companies House reveal that in its last financial year to the end of June, the company behind brands such as Chivas Regal and Ballantine's contributed £11.9m to the Chivas Brothers Pension Scheme, up £72,000 or 0.6% on the year before.
Chivas said that in the current financial year it expects to increase its contribution almost six-fold to £69.9m. Some £60.5m of this was made as a one-off contribution on March 4.
The market value of scheme assets as of June 2012 was £161.4m which Chivas, part of French-based group Pernod Ricard, said was sufficient to cover 81% of the value of each members' accrued benefits based on projected salaries.
Final salary pension schemes have come under pressure in recent years. Figures from the National Association of Pension Funds found that only 13% of final-salary pensions were open to new joiners in 2012.
Pressure on deficits has been increased by a sharp fall in corporate bond yields, which are used in pensions accounting.
The Chivas Brothers scheme, which is closed to new members, had a deficit of nearly £20m as of June 30, compared to £3.7m 12 months before, net of deferred tax.
Chivas Brothers Limited said in the accounts: "On February 28, 2013, the company reached agreement with the trustee of its UK defined benefit pension scheme to reduce the funding deficit and improve the security of the scheme.
"The company made a one-off payment of £60.5m on March 4, 2013, and entered into a new asset-backed funding structure secured on certain company properties."
The move follows a report earlier this year that the pension scheme is considering investing £60m in Chivas Brothers's own warehouses.
A spokeswoman for Chivas Brothers declined to comment further.
Around 52% of the fund is invested in liability-matching assets and 48% handed to fund managers including Edinburgh investment giants Standard Life Investments and Baillie Gifford to generate returns.
The funding move comes at a strong time for the whisky industry, including Chivas, which came under new leadership last month when Laurent Lacassagne, former head of parent group Pernod's European operations replaced Christian Porta.
The accounts revealed that Chivas Brothers Limited's pre-tax profit rose 28.1% to £201.9m in the year to June 30, 2012.
Turnover increased from £517.6m to £610.1m.
Over the same period operating profit at Pernod rose 9% to €2.1 billion (£1.7bn).
A Chivas Brothers spokeswoman said: "The results of the Chivas Brothers Scotch whisky and gin business are split across a number of separate UK legal entities within the Pernod Ricard group.
"As a result, the statutory accounts of Chivas Brothers Limited on a stand alone basis do not fully reflect the financial performance of the business in the quoted year."
In the report to the accounts Chivas, whose single malt whisky brands include Glenlivet and Aberlour, said: "The directors believe that the results disclosed for the year are in line with their expectations."
Turnover and gross profit were boosted by increased volumes and prices, while the gross profit margin remained at 59%.
"The directors are satisfied with the current trading performance of the company.
They also remain optimistic for the future having considered market forecasts and social trends," the company reported in the accounts. Employee numbers rose slightly to an average of 1537 from 1535.
The accounts showed that Asia overtook Europe as Chivas Brothers' largest market at £203.6m of sales last year, a third of the company's sales. This was a 28.6% rise on the year before.
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