Increased deficit funding

Posted: June 5th, 2018

Some good news!

Following the release of the Trustees’ latest summary funding statement for the MGN Pension Scheme to end 2016 – received recently by all scheme members – we are pleased to provide this update on the Company’s additional contributions over the next ten years to 2027, following its successful acquisition Northern & Shell.

Using information available at the time, last month our AMP newsletter reported on the revised deficit-funding agreement between the Company and Trustee following the triennial actuarial valuation at the end of 2016. This showed an increase in the deficit to £476m compared to £336.7m at the end of 2013.

The Company’s now additional £2.07m a year contribution for 2018-2020 inclusive, and then £5.3m extra a year for the next seven years (2021-2027), provides an extra £43.3m over the ten years. This is on top of the increased funding of £130.25m agreed following this January’s triennial actuarial valuation.

So the total Company funding for the MGN Pension Scheme over the ten-year period is now £399.31M. The remaining £76.69m needed to overcome the present £476m deficit will be made up by investment returns so as to provide a fully-funded MGNPS by the end of 2027. This extra funding is very welcome news and significantly reduces the risks of failing to meet the fully funded position by the 2027 target.