Qualified advisers answering your
Financial Questions
call 0800 092 1245

Diageo comes up with unique pension funding program

UK drinks giant Diageo has come up with a unique funding solution for its pension fund, which has a significant deficit at the moment. The company is set to hand over £430 million of scotch to its UK pension scheme and pay the fund £25 million a year for the right to use the whisky. All whisky used by the company will be replaced by Diageo and after 15 years the company will buy back the whisky for as much as £430 million, depending upon the pension fund deficit at the time.

While on the surface this may look like a particularly good deal for pension scheme it is actually a win-win situation for both parties. The pension scheme will obtain assets which are currently towards the lower end of the traditional valuation scale and the company will maintain its cash flow within the group. There have been similar transactions carried out by many UK companies in relation to physical property, i.e. buildings and offices, but this is the first time that whisky has been used as collateral.

We are likely to see more innovative final salary pension scheme funding programs in the short to medium term as the overall deficit in this particular area of the sector continues to grow.

Share this..

Related stories

Financial Guides

Financial Calculators

Our useful calculators can help you get your finances in order:

Latest News


Helpful new tax year facts that could affect you and your money

Blog | Seven helpful new 2016/2017 tax year facts that could affect you and your money. Our recent online blog shares a brief outline on how to stay up to date.

Read more

Useful Links

Popular Searches

Please Enter More Details

Enter More Details