Track Record

Outputs

Shareholder investment and gain

Reinvestment

Responsible approach to investing

Substantial improvements for all UK pension schemes under ownership

Responsible stewardship (figures up to 31 December 2021)

£1 in every £3

The GKN UK pension schemes are now in surplus helped by £1 in every £3 of free cash flow since acquisition being paid into the Group’s pensions schemes, thereby freeing up more free cash flow in the future. 

• GKN UK schemes now in accounting surplus of £172 million⁽¹⁾, equivalent funding surplus of c.£100 million.
• The Group’s gross pension plan liabilities have reduced by 25% during the year, including £379 million of gross liabilities transferred with businesses disposed and £366 million following a successful buyout of the pensioners of the GKN UK 2016 scheme.

^{(1) Includes a surplus of £179 million relating to the GKN UK Group Pension Schemes (numbers 1-4) and a deficit of £7 million relating to the GKN UK Post Employment Medical Scheme.}

Schemes for current businesses

The Melrose funding commitment made on acquisition of GKN has been fulfilled ahead of time. Ongoing annual payments are halved to £30 million and no funding requirement from future disposal proceeds.

For the GKN schemes, we were proactive, transparent and constructive in agreeing commitments with pension trustees during the acquisition of GKN. We committed to providing up to £1 billion of funding contributions; to doubling annual contributions to £60 million; to making £150 million upfront contributions and to further contributions on sales of businesses.

So far we have: 

• Eliminated the GKN UK defined benefit pension scheme accounting deficit.
• Applied more secure funding targets of Gilts +25 basis points (GKN 2016) and Gilts +75 basis points (GKN 2012 schemes 1-4) to achieve more prudent funding targets.
• Rebalanced the GKN schemes across the GKN divisions, to avoid overburdening any one business and to provide stability and better security for members. 
• Having funded the GKN 2016 scheme to 115%, we arranged a buyout with an appropriate insurer that secures the futures of over 8,000 pensioners’ member benefits.

GKN 2012 schemes 1-4