The trustees of Saga Group’s defined benefit (DB) pension scheme have proposed a seven-year deficit recovery plan totalling £39m to the company.

According to firm’s preliminary results report, the proposal comes as the trustees have “largely completed” the triennial valuation of the scheme, as at 31 January, and after discussions with the sponsor.

Under the plan, company deficit recovery contributions would have effectively began in February 2021 with a payment of £4.2m.

Following this, subsequent payments of £5.8m would be due each February thereafter until February 2027.

“Discussions with the trustees are ongoing but are expected to be concluded in the next two months,” the report stated.

The company, which specialises in products and services for the over-50s, revealed that its DB deficit, as measured on an IAS 19R basis, had fallen by £1.2m year-on-year to £4.3m as at 31 January 2021.

The scheme liabilities increased by £37.7m to £415.5m over the year, which the company attributed to a 25bps reduction in the discount rate used to value the liabilities.

However, this was offset by a £38.9bn increase in scheme assets, which rose to £411.2m due to the fall in interest rates.

"Saga has made significant progress in a year of unprecedented challenge, during which our key focus has been on serving our customers and keeping our colleagues safe,” commented Saga Group chief executive officer, Euan Sutherland.

“At the same time, we have continued the work to strengthen our financial position and started to deliver against our new strategy, outlined in September, which will return Saga to sustainable growth. 

"Looking ahead, while we are mindful of economic headwinds and the potential ongoing impacts of Covid-19, it is clear that there is significant pent-up demand among our customer base, the vast majority of whom have now been vaccinated and are ready to enjoy post-lockdown freedom.” 

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