Melrose Industries’ defined benefit pension schemes ended June 2019 with a total deficit of £1.33bn, its half-year report has revealed.

The firm, which specialises in buying and improving businesses, saw its deficit reduce slightly in six months, after closing December 2018 with a £1.41bn deficit.

It operates several DB pension schemes, the largest of which is the GKN UK 2012 Pension Plan, which is closed to new members and future accrual.

Melrose’s total DB schemes assets totalled £3.37bn, up from £3.27bn in December 2018, while liabilities decreased slightly during the same period, from £4.686bn to £4.692bn.

A one-off special pension contribution of £94m was made as part of the company’s commitment to contribute £150m to the GKN UK 2012 and 2016 schemes within the first year of GKN ownership.

A total of £111m was contributed to Melrose’s DB pension schemes, up from £20m six months prior, while £11m was paid to equalise pension benefits for men and women in relation to guaranteed minimum pension benefits.

It’s largest scheme, the GKN UK 2012 scheme, had a deficit of £583m, with assets totalling £2.19bn and liabilities totalling £2.77bn

The report continued: “The group has paid its committed one-off £150m contribution and is making ongoing annual contributions of £60m to the GKN UK 2012 and 2016 plans.

“In addition, the group has committed to contribute to these plans £270m upon the disposal of Powder Metallurgy, 10 per cent of the proceeds from disposal of other GKN businesses and 5 per cent of the proceeds from disposal of non-GKN businesses.”

The firm’s pension liabilities shrunk by over £400m following the disposal of Walterscheid Powertrain Group, the buyout of the Broan Aftermarket North America, Inc. Group Pension Plan and some members voluntarily choosing to leave certain pension schemes.

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