Tate & Lyle enters into full defined benefit pension scheme buy-in with Legal & General

| Filed in:

Agreement will deliver security for UK Scheme members while removing future risk for Tate & Lyle and saving £20 million of annual contributions
 

Making food extraordinary

19 September, 2019, London, UK: Tate & Lyle PLC (“the Company”) and the Trustee of the Tate & Lyle Group Pension Scheme (“the Scheme”), the Group’s UK pension scheme, today announce an agreement for a £930 million bulk annuity insurance ‘buy-in’ with Legal & General Assurance Society Limited (“Legal & General”). The agreement provides certainty and security for the Scheme’s affected members.

The buy-in secures an insurance asset from Legal & General that fully1 matches the remaining pension liabilities of the Scheme, with the result that the Company no longer bears any investment, longevity, interest rate or inflation risk in respect of the Scheme. Under the transaction, the Company will not contribute any incremental funding into the Scheme . 

The agreement is not anticipated to impact profit before tax for the year ending 31 March 2020 but will eliminate non-cash net finance income on the UK scheme accounting surplus  from the 2021 financial year.  De-recognition of the accounting surplus will result in a decrease in Group net equity by around £180 million.

Imran Nawaz, Chief Financial Officer of Tate & Lyle PLC, said:

“This transaction represents a good outcome for our UK scheme members, the Company and our shareholders. We have supported the Scheme over many decades and made significant cash contributions to remedy a deficit that has existed between the Scheme’s assets and liabilities. That funding, combined with excellent stewardship by the Scheme’s trustees, has meant that the Scheme can now be de-risked for the benefit of members and the Company. 

“Importantly, cash contributions into the Scheme will cease, saving around £20 million of cash annually from the 2021 financial year1, allowing the Company to focus our future investments on delivering profitable growth.”

Michael Chatterton, Chairman of Trustees of the Scheme, said:

“This is great news for Scheme members. After many years of funding from Tate & Lyle and careful management, working together in close partnership with the Company, we have now secured our members’ benefits through Legal & General. As a result, our members can continue to look forward to enjoying retirement knowing that their pensions are secure.”

END

1 Subject to final price adjustment for bulk annuity pricing.
2 In the year ended 31 March 2019 net finance income on the UK scheme was £5 million.


Contacts: 

Anna Taylor (media)
Corporate PR Manager
Tel: +44 (0)207 257 2209 or mobile: +44 (0)7766 361 515
mediaenquiries@tateandlyle.com

Christopher Marsh (investors)
VP Investor Relations
Tel: +44 (0) 20 7257 2110 or Mobile: +44 (0) 7796 192 688

About Tate & Lyle: 
Tate & Lyle is a global provider of solutions and ingredients for food, beverage and industrial markets.

Tate & Lyle operates through two global divisions, Food & Beverage Solutions and Primary Products, supported by the Innovation and Commercial Development and Global Operations teams. Food & Beverage Solutions is focused on growth by building leading positions globally in the categories of beverages, dairy, and soups, sauces and dressings. Primary Products is focused on delivering steady earnings and generating cash.

Food & Beverage Solutions consists of: Texturants, including speciality starches; Sweeteners, including low- and no-calorie sweeteners; and a Health and Wellness portfolio comprising mainly speciality fibres; and Stabilisers and Functional Systems, which are bespoke ingredient blends that ensure foods retain their structure.

Primary Products consists of high-volume sweeteners, industrial starches and fermentation products (primarily acidulants).  It also sells co-products from the corn milling process as animal nutrition.

Tate & Lyle is listed on the London Stock Exchange under the symbol TATE.L. American Depositary Receipts trade under TATYY. In the year to 31 March 2019, Tate & Lyle sales totalled £2.8 billion. For more information, please visit http://www.tateandlyle.com or follow Tate & Lyle on Twitter or Linkedin.