SSE pension surplus falls by nearly £200m

Energy supplier, SSE, saw its pension surplus fall by £195.2m to £146.5m between March and September 2020, its half-year report has revealed.

The firm primarily attributed the fall across its two pension schemes to an increase in inflation rates and decrease in discount rates due to market volatility associated with the Covid-19 pandemic.

The majority of the adverse movement was recognised in the Southern Electric Scheme as, due to hedging instruments in place including the buy-in entered into last year, the Scottish Hydro Electric Scheme is less exposed to market volatility.

As at 30 September 2020, the Scottish Hydro Electric Scheme had a surplus of £528.5m, while the Southern Electric Scheme had a deficit of £382m.

Deficit repair contributions fell to £17.7m in the six months up to 30 September 2020, down from the £42.6m seen in the six months up to 31 March 2020.

Employer contributions to the Scottish Hydro Electric Scheme fell from £5.8m to £0.5m in the half year, while its contributions to the Southern Electric Scheme fell from £66.5m to £27.4m during the same period.

Commenting within the report, SSE chair, Richard Gillingwater, said: "The resilience of SSE's business model and the ongoing commitment of our employees are reflected in the strong operational performance we have reported for the first half of 2020/21.

“Challenges lie ahead - not least in navigating another wave of the pandemic, the potential operational impact of the weather in the second half and the lingering uncertainties around Brexit - but these are far outweighed by the wealth of significant opportunities we have to create value in the transition to net zero emissions.”

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