Def Benefits Pension Schemes
SMG PLC
29 January 2007
SMG Defined Benefits Pension Schemes
The Board of SMG announces today the successful conclusion of discussions with
the Group's pensions trustees, securing the future of SMG's two defined
benefits schemes (the Scottish & Grampian Television Pension Scheme and the
Caledonian Publishing Pension Scheme).
The completion of the mortality study, carried out in co-operation with a
number of Scottish companies, and subsequent discussions with the SMG pensions
trustees have seen the Group's total pensions deficit crystallised as at
1 January, 2006, at £40m (net of tax). The Board notes that the investment
performance of these pension funds has been strong in 2006 and the funds' net
deficit as at 31 December, 2006, is estimated to have fallen to approximately
£22m (net of tax).
This deficit will be funded over a 10 year period with a payment of £4m (net of
tax) in the first quarter of 2007 followed by nine equal annual payments of
approximately £3m (net of tax), subject to review every three years thereafter.
Neither scheme will receive any proceeds as a result of a sale of Primesight,
but the Scottish and Grampian scheme will receive 10% of any other sale
proceeds over the deficit funding period, subject to a cap of a total of £4m.
The funding pattern is subject to further discussions with the Trustees and
possible review in the event of a merger or takeover of the Group taking place.
Agreement has also been reached with the funds' trustees to various changes to
future benefits including an amendment of the accrual rate for the Scottish &
Grampian Television Pension Fund from 50ths to 60ths for future service -
although some scheme members already have an accrual rate of 60ths. It is
further proposed that staff contribution rates to both schemes increase by 2%,
taking the Scottish & Grampian Pension Scheme members' contributions to 9% and
the Caledonian Pension Scheme members to 8%. SMG has today initiated a
consultation process with active pension scheme members, television unions and
the relevant staff representative body.
Commenting on the announcement, Donald Emslie, SMG's Acting Chief Executive,
said:
'We've worked very closely with the trustees to reach this agreement, which I
believe is a significant achievement. We recognise how important our pension
schemes are to our people and this resolution, subject to consultation, should
secure them for the future.'
29 January, 2007
Further enquiries:
Callum Spreng Tel: 0141 300 3605
Group Communications Director
SMG plc
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