Samuel Heath, the bathroom accessories specialist, has cut its pension deficit by £0.8m after a decline in liabilities outstripped a reduction in asset values.

According to its results for the year ended 31 March 2020, the deficit of the Samuel Heath & Sons plc Combined Scheme fell from £7.4m to £6.6m in the 12-month period, as the defined benefit scheme’s liabilities dropped from £16m to £15m.

This overshadowed the impact of changes in the scheme’s assets, which fell from £8.6m to £8.4m during the year.

Samuel Heath said that the worldwide drop in equity values caused by the Covid-19 pandemic had reduced the asset values held by the scheme by £900,000 between the beginning of February 2020 and year end, though subsequent gains in equities had more than made up for this drop by the start of July 2020.

The firm stated however, that it was also undertaking "extensive work" to forecast scenarios for the current year, emphasising that they all showed a large negative effect on cashflow, which is "not helped by [the firm] continuing to fund the large deficit in the pension scheme".

The Samuel Heath & Sons plc Staff Pension and Works Pension Scheme both have both been closed to future accrual from 30th April 2005, and were subsequently merged into the Samuel Heath & Sons plc Combined Scheme on 31st March 2006.

A 2019 actuarial valuation showed the market value of the Combined Scheme’s assets to be £8.609m, compared with liabilities of £16.966m, leaving it with a deficit of £8.357m

The trustees of the scheme and the company have since agreed a revised recovery plan, agreeing to make increasing contributions every year.

As this revised plan began in April 2020, the company has also increased the total value of its contributions to the scheme for 2020 by £267,000 to £783,000, courtesy of an additional single contribution.

During the next 12 months payments will be made to the scheme amounting to £1m.

The company also registered £299,000 in costs related to guaranteed minimum pension equalisation as an exceptional item following a legal case during the financial year, while it also paid £38,000 for pension scheme administration, down from £50,000 the year before.

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