LONDON (ShareCast) - (ShareCast News) - Morgan Advanced Materials has elected to make an accelerated cash contribution of an additional $36m to its US defined benefit pension scheme in December, it announced on Monday.
The FTSE 250 company said the US defined benefit pension scheme had a deficit under IAS19 at 30 June of around $46m, since when the funding position had improved due largely to positive returns on the asset portfolio.

In recent years, the group said it contributed between $10m and $11m per annum to the schemes under a funding recovery plan, which was anticipated to close the remaining deficit over a five-year recovery period to 2022.

"Following this additional payment, the US defined benefit pension scheme will be close to full funding on an IAS19 basis and no further deficit recovery payments are anticipated," the board confirmed in its statement.

"As a result the group's total ongoing payments to the defined benefit pension schemes across the group are currently estimated to reduce from the previously expected £25m per annum to £16.5m per annum from 2018."

The payment into the US defined benefit pension scheme was eligible for US corporation tax relief, and would also lead to a reduction in the US Pension Benefit Guarantee Corporation levy of around $1m per annum from 2018 onwards, the board confirmed.

Morgan said the payment would lead to a reduction in the IAS19 net defined benefit pension obligation and an increase in net debt by $36m in December.

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