The aggregate defined benefit pension scheme deficit of BBA Aviation has increased by £3.7m in the six months to 30 June 2019
BBA Aviation has seen its aggregate defined benefit pension scheme deficit increase by £3.7m in the six months to 30 June 2019.
Publishing its half year results, BBA Aviation said the total deficit for all of its DB schemes increased from £23.2 at 31 December 2018 to £27m at 30 June 2019. It said this was primarily due to lower discount rate assumptions.
In addition, the group revealed that in the first half of 2019, it completed and signed off the 2018 actuarial valuation of its UK DB plan.
As a result of this valuation and the initial recognition of past service liabilities in line with the recent High Court ruling in the Lloyds Banking Group case on Guaranteed Minimum Pension (GMP) equalisation we have agreed to make additional payments of £8.5m in total between July 2019 and September 2021, it stated.
Furthermore, in total BBA Aviation made £1.9m in pension scheme payments during the first half of the year, compared to £1.8m in the same period last year.
The results follow the announcement last week that BBA Aviation intends to sell its subsidiary, Ontic, to CVC Fund VII, providing that its UK pension scheme agrees with the company an alternative funding solution to the current asset-backed funding arrangement that it has secured against Ontic’s assets.
The board notes that active and deferred members of the company’s current UK defined benefit pension fund relate primarily to the retained group. The company will work with the pension trustee to agree an alternative funding solution to the current asset-backed funding arrangement, as part of the current asset backed funding arrangement that is secured against Ontic’s UK assets and release of this security will be required in order for the transaction to complete, BBA Aviation stated.
It noted that the company will also work with the group’s pension trustee to obtain its consent to release applicable security.