Morrisons reports £688m surplus for DB schemes

Britain’s fourth largest supermarket, Morrisons, has reported a net pension surplus of £688m in its full-year results.

The supermarket revealed that the surplus is down from £834m at the end of the first half, but up from £594m at the end of 2017/18.

It stated that it closed its Retirement Saver Plan (RSP) to new members and future accrual in the year, which resulted in one-off costs of £19m . It also made provision of £7m to accommodate the cost of equalising guaranteed minimum pensions for men and women, following the High Court judgment in relation to Lloyds Banking Group.

Furthermore, Morrisons said it is continuing to work with pension trustees to identify opportunities to de-risk the schemes. In January 2019, the trustees completed a further £413m buy-in of part of the Safeway scheme liabilities, bringing the cumulative total to £819m so far.

The supermarket operates several defined benefit schemes; the Morrison and Safeway Schemes provide pension benefits based on either the employee's compensation package and/or career average revalued earnings (care). The care schemes are not open to new members and were closed to future accrual in July 2015.

The RSP is a cash balance scheme, which provides a lump sum benefit based upon a defined proportion of an employee's annual earnings in each year, which is revalued each year in line with inflation subject to a cap. The RSP was closed to future accrual in September 2018.

Morrisons also operates a defined contribution scheme called the Morrisons Personal Retirement Scheme (MPRS) for colleagues during the 53 weeks ended 4 February 2018. During the year, the supermarket paid contributions of £28m to the scheme, and expects to contribute £79m for the following period.

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