Premier Foods has announced that it reached an agreement with the RHM Pension Scheme Trustee to suspend deficit contribution payments from 1 April 2024.

The suspension of future funds will take place earlier than expected due to the “strong performance of the pension scheme”, Premier Foods stated.

As a result of the suspension, the group said it will benefit from £33m increased free cashflow for the financial year ending 29 March 2025.

The group anticipates no further contributions to be payable after this date, subject to the results of the next triennial valuation.

The last actuarial triennial valuation of the scheme, as at 31 March 2022, showed a surplus in the RHM section of £665m and a deficit of the Premier Foods section of £368m.

Administration costs related with running the scheme of circa £5m per annum and the dividend match mechanism are both currently unchanged, it added.

Premier Foods chief financial officer, Duncan Leggett, said that “significant” progress in the “funding position of the pension scheme” enabled it “to take another important step to expected full resolution of the scheme by the end of 2026.”

He continued: “The scheme has reached this position following strong stewardship by the trustee over many years and we will continue to work collaboratively with them to further de-risk the scheme.”

The RHM Pension Scheme Trustee manages the RHM and Premier Foods sections of the pension scheme, following Premier Foods’ ‘landmark’ agreement to merge the group’s three pension schemes, RHM, Premier Foods and Premier Grocery Products, in June 2020.

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