On the go: Daily Mail and General Trust pension schemes could stand to benefit from the £1.4bn sale of insurance risk business RMS to Moody’s that is part of a broader restructuring at DMGT.
Besides aggregate costs of £210m with respect to RMS’s minority shareholders, DMGT’s sale of RMS will see it cease to act as guarantor with respect to one of the company’s pension schemes.
As a result, £60m will be placed in an escrow account in respect of that particular plan.
Meanwhile, DMGT’s contractual obligations to its pension schemes, the largest of which is in deficit, mean the trust is currently engaged in discussions with the scheme trustees about the impacts both of the RMS sale and the wider reorganisation.
The net surplus on the group’s defined benefit schemes increased from pro forma £240m at the start of the year to £287m at the half year, according to a financial report published in May.
Though the overall value of assets decreased in that period, this was outstripped by the fall in the value of its obligations.
“The funding plan agreed with the trustees is that from FY 2022 to FY 2025 inclusive, payments of £11m a year will be made directly into the schemes and, in addition, payments of £7m a year will be paid into escrow,” the report explained.
DMGT’s DB schemes are closed to new entrants and the next actuarial valuation is scheduled for March 31 2022.
“Pending conclusion of the discussion with the trustees, it is not possible to be definitive about the exact amount of the cash component of the conditional special distribution under the possible reorganisation, but the agreed sale price of RMS is as expected and the current broad estimate of approximately 610p per share remains unchanged,” DMGT’s announcement of the RMS sale stated.
