Norcros plc (LON:NXR), the market leading designer and supplier of high quality sustainable bathroom and kitchen products, has announced that it has concluded negotiations with the Trustee of the Company’s legacy defined benefit pension scheme in relation to the triennial actuarial valuation undertaken on 1 April 2024. This announcement follows the update provided by the Group within its Interim Results statement and presentation published on 21 November 2024.
The 1 April 2024 valuation has now been agreed, subject to completion of the formal documentation, with the prior actuarial deficit from April 2021 of £36.0m being updated to an actuarial deficit of £11.7m on a technical provision basis, representing a funding level of 96%.
The schedule of cash contributions to June 2027 of £3.8m per annum (indexed by CPI) that was agreed in the 2021 valuation, will continue. As a result of the new agreement, once the Scheme is deemed to be in surplus on a technical provision basis, contributions will be directed to an escrow arrangement. Cash contributions post June 2027 are expected to be less than c.£1m per annum and will only be paid to the extent that asset performance or any escrow funds do not cover ongoing scheme administration fees. The escrow arrangement minimises the risk that the Scheme becomes overfunded with a trapped surplus.
The valuation outcomes will now be submitted to the Pensions Regulator in the usual way.
James Eyre, Norcros Chief Financial Officer, commented:
“We are pleased that the Company and Trustee’s strong and constructive relationship has produced a further positive outcome to the triennial valuation process and, importantly, that the Company’s cash contribution materially decreases from June 2027. The agreement will mean that the Scheme should remain in a healthy funding position and we look forward to continuing to work positively with the Trustee.”
Notes:
1) Key features of the 2024 actuarial valuation include: discount rate gilts +0.5% (previously gilts +1.20%), aligned mortality ‘base table’ to actual Plan’s member death experience and application of the latest actuarial models and CMI 2023 tables.
2) As a result of indexation by CPI, the cash contribution agreed in 2021 of £3.8m per annum is currently £4.2m per annum.
