Vodafone’s DB deficit falls by €184m

Written by Theo Andrew

Vodafone’s defined benefit deficit has fallen by €184m to €410m, as 31 March 2018, on an IAS 19 accounting basis, it has revealed.

In its end of year results published today, 15 May 2018, the telecommunications company said that it has contributed €301m to its Vodafone UK Group Pension Scheme since the 19 October 2017, offset by €57m of net actuarial losses arising from “changes in demographic assumptions”.

Last year, the firm’s deficit totalled €600m as of 31 March 2017, double the €300m recorded in 2016, “principally due to a decrease in the discount rates used for defined benefit schemes in the UK and Eurozone”.

Vodafone completed triennial actuarial valuation of its scheme as of 31 March 2016, separate to the IFRS accounting basis above, which showed a net scheme deficit of €317m, comprising of a €385m deficit for the Vodafone section and a €68m surplus for the CWW section.

Following the triennial valuation, the scheme’s trustees agreed on a cash contribution of €209m into the Vodafone section and a €66m contribution into the CWW section.

Vodafone has no plans to make any further contributions following the 2016 valuation.

According to Vodafone, the cash payments were invested into annuity policies issued by a third-party insurer, meaning there was “no significant net impact to free cash flow”.

The firm’s dividends increased by 2 per cent over the financial year to 31 March 2018, representing a 10.23 eurocent per share dividend.

Related Articles

Cautious optimism in a challenging world
Matthew J. Bullock, Investment Director, Global Multi-Asset Strategies, Wellington Management, meets Francesca Fabrizi to discuss how multi-asset strategies can help investors
Latest News Headlines
Most read stories...
World Markets (15 minute+ time delay)