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RNO details action to reduce, de-risk pension liability

07 December 2015 07:47

Renold said The Renold Pension Scheme (its UK legacy Defined Benefit pension scheme) has completed a second medically underwritten insured buy-in that fully de-risks another GBP27m (c.25%) of the current UK pensioner liabilities and follows a similar transaction in April 2015.

Both transactions were in respect of the highest risk pensioner members and the transaction announced today results in about 50% of current UK pensioner liabilities being fully de-risked.

"The Group is now fully protected against risks arising from volatility in longevity, inflation and interest rates in respect of these members. These factors will be relevant to future triennial revaluations and funding discussions with Trustees."

Meantime, a German court has confirmed that the pension scheme of the Group's subsidiary in Germany was properly closed to future accrual with effect from 30 September 2013.

This is expected to result in a reduction in the Group's unfunded pension obligations of approximately 6.0% or £1.5m, based on market conditions and exchange rates as at 30 September 2015 and will be fully disclosed in the Group's Annual Report and Accounts for the year ending 31 March 2016.

The confirmed closure also reduces annual service costs as well as eliminating the German scheme's exposure to the risk of salary inflation.

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