In Issue 6 of The Link newsletter, we updated our members on the Scheme funding position, and on the mechanism to vary the cash contributions made by the Coats Group plc (“Coats”) to Coats UK Pension Scheme (“the Scheme”).
As outlined in The Link, Coats can switch off its monthly contributions to the Scheme if the Scheme reaches over 100% funding (on the technical provisions basis) and is in surplus.
The Trustee of the Scheme has reached agreement with Coats which will enable contributions to be switched off from 1 January 2024.
Coats has agreed to pay the Scheme a one-off lump sum payment of £10 million, which is expected to move it into a surplus position. This means that from 1 January 2024, cash contributions made by Coats to the Scheme will be switched off.
This puts the Scheme in a fully funded position, which is good news for all members, and helps Coats to free up cashflow to enable additional growth opportunities.
Coats will resume paying monthly contributions on a pre-agreed basis if the funding drops to below 99% on the technical provisions basis.