Renold PLC De-risking exercise for the Renold Pension Scheme (6477L)
April 29 2015 - 1:03AM
UK Regulatory
TIDMRNO
RNS Number : 6477L
Renold PLC
29 April 2015
Renold plc
("Renold" or "the Company" or "the Group")
De-risking exercise for the Renold Pension Scheme
Renold, a leading international supplier of industrial chains
and related power transmission products, announces a transaction to
fully de-risk approximately 25% of current UK pensioner
liabilities.
Medically underwritten insured buy-in
The Renold Pension Scheme (the Group's legacy Defined Benefit
pension scheme in the UK) has completed a medically underwritten
insured buy-in that fully de-risks approximately GBP25m (or 25%) of
the current UK pensioner liabilities (1) in respect of the highest
liability pensioner members (2) .
Attractive pricing terms, combined with the medical underwriting
process, mean that the UK scheme was able to secure the liabilities
at a small discount to their assumed funding valuation. The
transaction is approximately neutral from an accounting valuation
perspective and was structured as a 'buy-in' and hence the
insurance policy remains an asset of the scheme. As a result, the
transaction has no impact on the funding level of the scheme and
did not require any additional contributions from the Group.
Consideration for the buy-in will be sourced entirely from a
portion of the scheme's holding of Index Linked UK Government
bonds.
The most significant impact of the transaction on the Group is
the de-risking effect on this section of current pensioner
liabilities. The Group is now fully protected 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.
Robert Purcell, Chief Executive of Renold, commented:
"The buy in of 25% of current pensioner liabilities is an
important step in de-risking the Group's cash flows and balance
sheet from the impact of volatility in pension liabilities.
Re-building the Group's balance sheet and closely managing our
legacy pension obligations are important aspects of the Group's
overall strategic objective to deliver sustainable gains in
shareholder value."
29 April 2015
(1) Liabilities assessed on a scheme funding basis
(2) High liability members from a scheme perspective are those
with higher annual pension incomes who represent a significant
concentration of longevity risk for the scheme.
ENQUIRIES:
Renold plc 0161 498 4500
Robert Purcell, Chief
Executive
Brian Tenner, Finance
Director
Instinctif 020 7457 2020
Mark Garraway
Helen Tarbet
NOTES FOR EDITORS
Renold is a global leader in the manufacture of industrial
chains and also manufactures a range of torque transmission
products which are sold throughout the world to a broad range of
original equipment manufacturers and distributors. The Company has
a well deserved reputation for quality that is recognised
worldwide. Its products are used in a wide variety of industries
including manufacturing, transportation, energy, steel and
mining.
Further information about Renold can be found on the website at:
www.renold.com
This information is provided by RNS
The company news service from the London Stock Exchange
END
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