Hard landscaping manufacturer Marshalls has seen its DB pension scheme surplus rise by 132 per cent in the six months to 30 June 2016.

In its latest financial statement released today, the balance sheet surplus of the DB pension scheme was a surplus of £7.9m at 30 June, up from £3.4m in December 2015. In June 2015, the scheme recorded a surplus of £0.8m surplus.

The surplus has been determined by the scheme actuary using assumptions that are considered to be prudent and in line with current market levels. Significant market volatility has been evident in the first six months of 2016 and this volatility increased further following the EU referendum on 23 June 2016.

The most notable change has been a reduction in the AA corporate bond rate from 3.7 per cent to 2.7 per cent, in line with market movements. This caused the IAS 19 pension liabilities to increase by £48.6m. However, the scheme assets have increased by £53.1m due mainly to the high proportion of liability-driven investments whose performance matches the liabilities. The expected rate of inflation reduced to 2.9 per cent from 3.1 per cent at 31 December 2015.

The defined benefit section of the scheme, which closed to future service accrual on 30 June 2006, provides pension and lump sums to members on retirement and to dependants on death.

Members of the defined benefit section became entitled to a deferred pension on closure. Members no longer pay contributions to the defined benefit section. Company contributions to the defined benefit section after this date are used to fund any deficit in the scheme and the expenses associated with administering the scheme as determined by regular actuarial valuations.

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