National Express DB pension deficit falls to £90m

The combined deficit for the National Express defined benefit (DB) pension schemes has fallen by over £20m, from £116.8m in 2018 to £90m at 31 December 2019.

The group's financial report confirmed that deficit contributions were approximately £8m per annum until 2020, with a further £7.8m in contributions expected in this year.

The company agreed a three-year annual deficit repayment plan in 2017 with the trustees of the West Midlands Integrated Transport Authority Pension Fund, which ends in March and has an average contribution of £7.7m per annum.

The West Midlands Bus Plan (WM Bus Scheme) deficit has also fallen by over £20m to a £99.1m deficit (£127.3m in 2018).

Whilst the group also saw a slight decline in pension assets, falling from £14.9m in 2018 to £14.2m in 2019, its liabilities also decreased from £131.7m to £104.2m.

National Express has two principal plans; the UK Group scheme, which closed to new accrual in 2011, and the WM Bus Scheme, which remains open to accrual for existing active members only.

The past year also saw the group pay £10.3m in operating costs for the scheme, with the majority (£6.4m) used to fund the defined contribution schemes.

The Group Pension Scheme, which had a £14.2m surplus at 31 December 2019,also completed an insurance buy-in transaction with Rothesay Life in October 2018.

Although the transfer process for this is still ongoing, the company has no obligation to make any payments and has not included the scheme in its DB pension liabilities or assets.

Commenting on the financial report, National Express Group chief executive, Dean Finch, commented: "Revenue and profit are up strongly and free cash performance has beaten our expectations. All businesses have delivered organic growth.”

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