Balfour Beatty has agreed new terms with the trustees of its defined benefit (DB) pension scheme over an £85 million deficit payment that was due next year.
The UK infrastructure group will now make the payment over the next eight years, starting with a £4 million cash payment in 2016.
This will then increase annually thereafter to help reduce its estimated £284 million pension deficit.
Under the new terms of the deal, the pension fund will transfer £85 million in private finance initiative (PFI) assets into a Scottish Limited Partnership, in which the scheme will participate.
The delay of the payments was agreed after the organisation cancelled a £200 million share buyback, which had been planned following the sale of its US consultancy arm, Parson Brinckerhoff to WSP Global.
Leo Quinn, chief executive of Balfour Beatty Group, said: “We are pleased that the pension fund trustee has worked with us to re-profile the pension payments, in light of the cancelled share buyback.
“This gives a clear plan on how the pension deficit will be reduced over time, while maintaining balance sheet flexibility as we drive the required organisational change and performance improvement, as set out in the ‘Build to Last’ programme.”
Adrian Mathias, chairman of the pension fund trustee, added: “We are pleased to have reached agreement with the organisation on this matter.
“We recognise the importance of a strong balance sheet to the organisation and welcome the opportunity to participate in the proposed Scottish Limited Partnership.”
