Recruitment company Hays has revealed its defined benefit (DB) scheme surplus fell by £6.3m in 2023/24 due to a decrease in expected returns.

Its final results report showed that its DB scheme surplus on an IAS19 basis declined from £25.7m to £19.4m during the 12 months.

While the reduction was driven by lower expected returns and a change in financial assumptions, this was partly offset by company contributions.

The firm paid £17.7m in deficit recovery contributions into the scheme in 2023/24, up from £17.2m in 2022/23, in line with its agreed deficit recovery plan.

The scheme trustees are currently undertaking the 2024 triennial valuation; its actuarial deficit was £23.9m on a technical provisions basis at the scheme’s last triennial valuation in 2021.

Hays noted that its long-term objective for the scheme was reaching full buyout, and therefore its recovery plan remained unchanged and comprised an annual payment of £16.7m from July 2023, with a fixed 3 per cent uplift per year.

The scheme was closed to new entrants in 2001 and to future accrual in June 2012.

Hays had a net finance charge of £10.4m in 2023/34, up from £4.9m in 2022/23, which it said was primarily due to a £1.3m charge on DB pension obligations.

"We saw increasingly challenging market conditions through financial year 2024,” Hays chief executive, Dirk Hahn, stated.

“Our profitability was significantly impacted, including our three largest markets of Germany, Australia and the UK.

“Against this backdrop, we have focused on enhanced operational rigour, driving consultant productivity and strong cost management, and are determined to build a more resilient Hays.”

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