Stagecoach has revealed that the cost of equalising guaranteed minimum pensions (GMPs) for men and women will cost £24.2m.
Publishing its interim results today, 5 December, Stagecoach said it has recorded a pre-tax exceptional expense of £24.2m, which reflects its best estimate of the effect the ruling will have on its pension liabilities.
It follows a ruling in October by the High Court, which said Lloyds Banking Group must equalise GMPs for men and women, a judgment that brought clarity for the whole sector.
“The change in pension liabilities recognised in relation to GMP equalisation involves estimation uncertainty. It is expected that there will be follow-on court hearings to further clarify the application of GMP equalisation in practice. Also, it is not yet known whether Lloyds Banking Group will appeal the High Court judgment. The judgment was made one day prior to the Group's balance sheet date of 27 October 2018 and the Group is one of the first companies to publish financial statements with a balance sheet date after the date of the judgment,” Stagecoach said.
As a result, Stagecoach said its directors have had “limited time” to consider the full implications of the judgment.
“As the outcome of future court hearings cannot be reliably predicted, it is not practical to quantify the extent of the estimation uncertainty but the best estimate reflects the information currently available. The directors will continue to monitor any further clarifications or court hearings arising from the Lloyds case and consider the impact on pension liabilities accordingly.”
Stagecoach is responsible for several pension schemes including: The Stagecoach Group Pension Scheme, The South West Trains section of the Railways Pension Scheme, The Island Line section of the Railways Pension Scheme, The East Midlands Train section of the Railways Pension Scheme, The East Coast Main Line section of the Railways Pension Scheme, and a number of Local Government Pension Schemes.
As at 27 October 2018, the total assets for all schemes were £2m (£4.6m at 28 April 2018), liabilities were £153.5m (£146.8m at 28 April 2018, and the deficit was £151.5m (£142.2m at 28 April 2018).