Smiths News PLC
10 January 2007
SMITHS NEWS ANNOUNCES REVIEW OF DEFINED BENEFIT PENSION SCHEME
Smiths News, the UK's leading newspaper and magazine distributor, has written to
employees that are contributory members of the Final Salary WH Smith Pension
Trust scheme (a Defined Benefit (DB) or Final Salary pension scheme) proposing
changes to the scheme.
The DB scheme was closed to new members in 1995. The proposals being put forward
by the company and which have been discussed with the Trustees, would result in
the scheme now being closed to existing members. If the current proposals are
implemented these members would be entitled to similar defined contribution
pensions benefits to those available to employees that have joined the company
since the Final Salary scheme was closed to new members.
Closure of the DB scheme to existing members affects only future contributions.
It does not change the benefits that have already been earned through membership
of the scheme, nor does it affect members who have left the company or have
retired.
Commenting on the proposed changes, Glenn Leech, HR Director said:
'The long term uncertainty over the cost of maintaining a final salary pension
scheme coupled with low investment returns and the increase in life expectancy
mean that continuing to support a final salary pension scheme is becoming
increasingly difficult for companies. Therefore we are today making proposals to
members of the scheme which we believe to be in the long-term interest of the
company and our employees.'
Contacts
For more information please call:
Kate Holgate, Brunswick Group LLP 020 7404 5959
Notes to Editors
Smiths News demerged from WH Smith on 31 August 2006. Smiths News is the UK's
leading newspaper and magazine wholesaler delivering over 60 million
publications to 22,000 retailers every week.
Approximately 700 of Smiths News' 4,300 employees are members of the effected
final salary scheme.
The company will now enter a consultation period regarding these proposals.
At demerger the Pension Trust was split into two sections: one for Smiths News
and one for WH Smith. This involved segregating the assets and liabilities of
the Pension Trust to reflect the membership of the two businesses. Upon the
demerger, as agreed with the Trustees of the WH Smith Pension Trust a £25
million payment was made into the Smiths News section of the scheme.
Upon sectionalisation and after taking into account the £25m one-off payment,
Smiths News net pensions deficit as at 1 September 2006 would have been £17m and
£27m on a IAS 19 basis and an ongoing basis, respectively, net of related
deferred tax.
In addition to the one-off payment Smiths News also agreed with the Trustees to
make ongoing pension funding payments of circa £5m in total each year for five
years.
This information is provided by RNS
The company news service from the London Stock Exchange