Renold has merged three of its UK defined benefit (DB) schemes in an attempt to reduce costs.

The company has also supported an asset backed funding structure in a move which will lead to a £1m annual reduction in cash funding costs.

Members of The Renold Group Pension Scheme (RGPS) and the Jones and Shipman Retirement Benefits Plan (1971) (J&S) have been merged into the Renold Supplementary Pension Scheme 1967 (RSPS), which has now been renamed the Renold Pension Scheme, and the start of the formal wind up of the RGPS and J&S schemes has already begun.

From the RGPS and the J&S schemes, a total of 2,604 members were entitled to receive a lump sum on the wind up of their schemes and 1,307 members chose this option.

The total amount of liabilities discharged during the wind up will be just under £11m and the net impact of the merger on the group balance sheet will be disclosed in the chain manufacturer's interim results in November this year.

The 1,297 members who did not elect to receive a lump sum have been transferred to the new fund, and all members of the newly formed scheme will continue to receive their benefits in full and unchanged.

Renold plc chief executive Robert Purcell said: "The merger of the UK DB pension schemes brings a significant reduction in the group's annual cash costs with a much lower administrative burden.

"The merger is in line with the Group's stated objectives of lowering our breakeven point and carefully managing cash flow."

First published 10.07.2013

monique_simpson@wilmington.co.uk