Mitchells and Butlers agrees new recovery plan to reduce DB funding deficits

The UK’s largest operator of managed restaurants and pubs Mitchells and Butlers has agreed a new schedule of contributions under a 10 year recovery plan to help reduce DB funding deficits of £572m.

The group has agreed to increase contributions from £40m to £45m per annum for three years effective from 1 April 2013.

From 1 April 2016 the contributions will be increased each year by RPI (capped between 0 per cent and 5 per cent).

Annual contributions will be fixed in nominal terms for the first three years and indexed to RPI thereafter.

Mitchells and Butlers said the group has also agreed to make a further payment of £40m on terms to be agreed with the trustees by 30 September 2015.

The impact of this agreement will be reflected in the financial statements for 52 weeks ended 29 September 2014.

The group’s DB funding deficits rose by £172m due principally to lower real gilt rates and an increase in assumed longevity.

Last year, the National Employment Savings Trust revealed that Mitchells and Butlers opted to use its auto-enrolment savings scheme for DC savers.

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