Pension? Pass the cream crackers

Dairy Crest is to plug its pension scheme deficit with cheese.

The dairy products manufacturer, which produces brands such as Cathedral City cheese, Country Life butter and Clover spread, has granted the defined benefit (DB) scheme a floating charge over maturing cheese inventories with a maximum realisable value of £60 million. The move is aimed at improving the pension scheme’s position in the event of insolvency, while retaining funds within Dairy Crest.

Inventories of maturing cheese are estimated at £150 million as of 31 March 2013.

The company has also agreed to pay a one-off cash contribution of £40 million to the pension scheme. This is in addition to its on-going annual deficit contributions of £20 million, which are paid in monthly instalments.

The DB scheme closed to new members in 2006 and to future accrual in 2010.

www.employeebenefits.co.uk/home/dairy-crest-plugs-pension-deficit-with-cheese/101794.article