Company Announcements

Update on U.K. DB Pension Scheme

Source: RNS
RNS Number : 9746G
TT Electronics PLC
21 November 2022
 

 

 

 

 

 


THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION

 

21 November 2022

 

TT Electronics plc

 

TT fully de-risks UK DB Pension Scheme

 

TT Electronics plc ("TT", "the Group"), a global provider of engineered electronics for performance critical applications, is pleased to announce that it has completed a buy-in of all its UK defined benefit pension liabilities giving an immediate £6 million cash flow benefit.

 

The Trustee of the TT Electronics Pension Scheme (the "Scheme") has purchased a bulk annuity insurance policy from Legal and General Assurance Society Limited ("L&G"), covering all liabilities required to pay all future defined benefit pensions for the Scheme's circa 5,000 members and any eligible dependants.  

 

The purchase of this insurance policy is the successful culmination of extensive work over the last few years by TT and the Scheme Trustees.  The insurance policy has been purchased using existing assets held within the Scheme, without the need for TT to make any additional contributions.

 

TT will not be required to make any future contributions into the Scheme regarding defined benefit liabilities and the buy-in delivers greater security to the Scheme's members. The Scheme's circa £400 million of liabilities are now matched by the insurance policy, and TT no longer bears any investment, longevity, interest rate or inflation risk in respect of the Scheme. 

 

There will be an immediate benefit to the Group's current year cash flow of £6 million and an equivalent annual improvement to free cash flow in future years.

 

The pension benefits that Scheme members will receive in the future are almost entirely unaffected by this transaction.

 

 

Mark Hoad, TT Chief Financial Officer commented:

 

"This transaction is an excellent outcome for our defined benefit pension scheme members, TT and our shareholders. We have worked hand in hand with the Scheme's Trustee over the last few years to reach this position. Those efforts, combined with excellent stewardship by the Scheme's Trustee Directors, has meant that the Scheme can now be fully de-risked for the benefit of members and the Group. 

 

Importantly, the successful execution of this transaction means there will be a significant increase in TT's annual free cash flow."

 

 

For further information please contact:

 

 

TT Electronics plc     

Tel: +44 (0)1932 827 779

Richard Tyson, Chief Executive Officer

Mark Hoad, Chief Financial Officer

Kate Moy, Head of Investor Relations and Communications

 

 

MHP

Tel: +44 (0)20 3128 8100

Tim Rowntree / Ollie Hoare

 

Notes:

 

1.   Established in 1836, Legal & General is one of the UK's leading financial services groups and a major global investor, with over £1.4 trillion in total assets under management of which a third is international.

 

 

About TT Electronics

TT Electronics is a global provider of engineered electronics for performance critical applications.

TT solves technology challenges for a sustainable world. TT benefits from enduring megatrends in structurally high-growth markets including healthcare, aerospace, defence, automation and electrification. TT invests in R&D to create designed-in products where reliability is mission critical. Products designed and manufactured include sensors, power management and connectivity solutions. TT has design and manufacturing facilities in the UK, North America, Sweden and Asia.

Cautionary statement

This update contains forward-looking statements. These have been made by the directors in good faith based on the information available to them up to the time of their approval of this update. The directors can give no assurance that these expectations will prove to have been correct. Due to the inherent uncertainties, including both economic and business risk factors underlying such forward-looking information, actual results may differ materially from those expressed or implied by these forward-looking statements. The directors undertake no obligation to update any forward-looking statements whether as a result of new information, future events or otherwise.

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