St Austell brewery says it too has pension deficit
Another regional brewer has disclosed that a pension deficit continues to present a major issue for it.
£3.8mSt Austell Brewery made a special contribution of £500,000 to its pension scheme in the year to 31 December 2005 but saw its net deficit increase by £86,000 to £3.8m.
In recently filed Companies House documents, St Austell chairman Piers Thompson said: "We continue to review the appropriateness of our pension arrangement on an on-going basis."
Substantial deficitsOther brewers with substantial pension deficits include Charles Wells, with a £14.8m funding hole, Everards, with a £9.1m gap, and Heavitree Brewery with a shortfall of up to £7m.We continue to review the appropriateness of our pension arrangement on an on-going basis.Piers Thompson, St Austell Chairman
Some brewers, including Adnams, have closed their final salary pension schemes as a way of dealing with the problem.
Charles Wells is increasing its contributions this year to the equivalent of 26.8% of pensionable salaries, up from 21.1% last year.
Pension costs £2.18mLast year its pension costs were £2.18m, a large jump from £1.11m in 2004.
The company is expecting to use "most" of the £10m it received from Young's for its stake in the new brewing joint venture, Wells and Young's Brewing Company, to bring up-to-date pension provisons for staff transferring into the new company.
£1m a yearPaul Wells, managing director of Charles Wells, said the company would pay in around £1m a year to fund a final salary pension scheme.
"It's a promise we made to our staff who have put in a lot of hard work over a lot of years."
Everards, which saw profits clipped by £847,000 in 2005 because of extra pension costs, is charging its current deficit to the profit-and-loss account over a 12-year period.
Heavitree surveys black holeHeavitree chairman William Tucker said earlier this year:
"We started our pension scheme in 1963. Proper advice was taken and the cost of generous pension plan was well within our means.
"Longer life spans, exacerbated by new rules about the balance of funds invested in equities as opposed to gilts and Gordon Brown's raid on dividends received by pension funds have led to ever-increasing contributions.
"All this gives rise to a black hole which has been variously estimated at £1.4m at 1 January 2002, £4.2m at
1 January 2005 (or £7.4m in the event of cessation)."
