De La Rue has entered into an agreement with De La Rue Pension Trustees Limited to bring forward an actuarial valuation of the De La Rue Pension Scheme from 31 December 2022 to as at 5 April 2021.

The valuation showed that the scheme deficit had fallen to £119.5m, as at 5 April 2021.

The company and trustee had previously agreed, in May 2020, to a schedule of deficit recovery contributions totaling approximately £177m from April 2021 to March 2029.

Following the new valuation, the scheme actuary confirmed that the deficit could be funded through contributions of £15m a year, from April 2022 to March 2029.

This represents a £57m reduction in payments to the scheme by De La Rue, with the new agreement avoiding the previously agreed increase in contributions from £15m to £24.5m from April 2023 to March 2029.

For the actuarial valuation to be brought forward, the relevant De La Rue group companies that are guarantors to the group’s principal Bank Facility Agreement have entered into a guarantee with the trustee that provides the scheme with an equal guarantor recourse ranking to the Bank Facility Agreement.

De La Rue added that it had committed to engage with the trustee should the firm be considering any ‘significant’ transactions that could potentially lead to material detriment to the scheme.

The trustee will have a consent right where De La Rue incurs priority financial indebtedness beyond that permitted by its principal banking facilities.

De La Rue also confirmed its support in principle to both medium- and long-term strategic objectives of the trustee in relation to any partial buy-in or full buyout of the scheme, subject to appropriate pricing and commercial terms.

"I am delighted that we have reached agreement with the trustee that continues to honour the commitments we made back in 2020 to pay off the scheme deficit by 2029, and also introduces further substantial protections for members of the scheme,” commented De La Rue chief executive officer, Clive Vacher.

“At the same time, a £57m reduction in cash contributions to the scheme will clearly benefit the group's projected future cash generation.”

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