The Whitbread PLC pension fund is injecting £100million into its pension fund courtesy of a number of its hotels and restaurants in a bid to curb its huge deficit.

Whitbread is the latest FTSE 100 company to announce that it will be using property to fund its pension schemes, following on from Marks and Spencer and Sainsbury's. The new approach to funding was developed by Deloitte, and has also been put to use by John Lewis and ITV.

The pension scheme trustee has formed a partnership with Whitbread, backed by a stake in the company's hotel and restaurant portfolio, and Whitbread will continue to control the properties while the partnership provides income to the pension scheme.
"Whitbread has used its hotel and restaurant assets in a novel and intelligent way to make a significant contribution to the pension scheme," explained David Robbins, Deloitte pensions partner who advised Whitbread.

Whitbread's group finance director, Christopher Rogers, said the approach is an "efficient" use of the group's property assets, and "benefits Whitbread in terms of cashflow".

The move provides increased cash flows to the scheme "which are very well secured without placing undue strain on the company," said Keith Jones, chairman of the Whitbread pension fund trustee board.

With FTSE 100 pension scheme deficits growing to more than £100bn, Deloitte believes this solution could become more widely used to help tackle the pensions crisis.

According to Whitbread's financial results for the year to 4 March 2010, there was an IAS 19 pension deficit of £434.0 million (£341 million after tax), which compares to £233.0 million (£167.8 million after tax) as at 26 February 2009.

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