Taylor Wimpey to reconvene pension payments after funding level drop

Taylor Wimpey will continue paying contributions into its pension scheme after its funding level fell below 94 per cent, its end of year results revealed.

According to its latest quarterly test, the group said that the funding level fell from 99 per cent to 94 per cent, following a fall in global equity valuations in Q4 2018.

Under the current contribution mechanism, tested quarterly, scheme contributions will be suspended if the funding level rises above 96 per cent.

In a trading statement issued yesterday, 27 February, Taylor Wimpey said: “As a result of this latest quarterly test, the group will recommence regular contributions from January 2019, until the scheme is valued as fully funded. In addition, the group will continue to cover scheme expenses and make contributions via the Pension Funding Partnership.”

According to the group, contributions totalled £34.1m in 2018, while payments are expected to increase to £47.1m per annum in 2019, as long as the fund remains less than 100 per cent funded.

Despite this, Taylor Wimpey Pensions Scheme recorded a surplus of £30.9m at 31 December 2018, with total retirement benefit obligations of £133.6m.

The group said it expects the process of guaranteed minimum pensions equalisation to cost £16.1m.

It added that the underlying volatility of the scheme "remains low" due to the £200m completed in 2014.

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