THE HOME RETAIL GROUP Pension Scheme has seen its accounting deficit jump from £7.5m to £115.3m over the last 12 months.
The firm, which operates the Argos and Homebase stores, revealed in its full year results that the deficit had been inflated by a reduction in the discount rate and the effect of a pensioner buy-in.
It said the present value of scheme liabilities had increased by £123.4m to £879.7m, driven principally by a drop in the discount rate to from 5.7% to 4.8%, while assets increased by £15.6m to £764.4m, reports sister publication Professional Pensions.
The asset value was reduced as a result of a buy-in with Prudential Retirement Income Limited to insure benefits for the scheme’s pensioner members, agreed last May.
The scheme transferred cash and assets equivalent to £278m to the insurer under the deal and while the company said the deal was financial neutral on an actuarial basis, it has reduced the assets by approximately £45m.