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Tate & Lyle Group Pension Scheme agrees £347 million partial pensioner buy-in


Tate & Lyle PLC (“Tate & Lyle”) announces that the Trustee of the Tate & Lyle Group Pension Scheme, Tate & Lyle’s principal UK defined benefit scheme (“the Group Scheme”) has agreed a £347 million partial pensioner buy-in of approximately 43% of total pensioner liabilities with Legal & General plc (“L&G”), which effectively hedges these liabilities in full.

Tim Lodge, Tate & Lyle’s Chief Financial Officer, said "Tate & Lyle is committed to meeting our pension commitments to existing and former colleagues. We are delighted the Group Scheme Trustee has secured this agreement with L&G, well known as a high-quality long-standing annuity provider. This transaction is an important step in our strategy to work with our schemes’ trustees and fiduciaries to reduce pension risk on a phased basis over time.”

The buy-in effectively covers around 43% of the Group Scheme’s total pensioner liabilities and represents approximately 30% of the Scheme’s total liabilities based on the ‘Technical Provisions’ assumptions agreed with the Trustee at the last triennial valuation updated for current market conditions.

The buy-in involves the purchase of a bulk annuity policy under which L&G will pay to the Trustee amounts equivalent to the benefits payable to three out of every seven of the Group Scheme’s pensioner members (“the Buy-In Members”). The premium for the annuity policy is £347 million and will be paid by the Trustee in a combination of assets and cash from the Group Scheme. It is anticipated that there will be no material impact on the Group’s cash flows or adjusted (note 1) earnings as a result of the partial buy-in.

The pension liabilities for the Buy-In Members remain with the Group Scheme, and the matching L&G annuity policy will be held within the Group Scheme as an investment of the Trustee, so the benefits of Group Scheme members are unaffected by this transaction and members will not see any changes in the way their pensions are paid.

Note 1 adjusted earnings exclude exceptional items, post-retirement benefit interest and amortisation of intangible assets acquired through business combinations

About Tate & Lyle:

Tate & Lyle is a global provider of ingredients and solutions to the food, beverage and other industries, operating from over 30 production facilities around the world.

Tate & Lyle operates through two global business units, Speciality Food Ingredients and Bulk Ingredients, supported by Innovation and Commercial Development. The Group’s strategy is to become the leading global provider of Speciality Food Ingredients through a disciplined focus on growth, and by driving the Bulk Ingredients business for sustained cash generation to fuel this growth.

Speciality Food Ingredients include starch-based speciality ingredients (corn-based speciality starches, sweeteners and fibres), no calorie sweeteners (including SPLENDA® Sucralose) and Food Systems which provides blended ingredient solutions. Bulk Ingredients include corn-based bulk sweeteners, industrial starches and fermentation products (primarily acidulants). The co-products from both divisions are primarily sold as animal feed.

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 2012, Tate & Lyle sales totalled £3.1 billion. SPLENDA® is a trademark of McNeil Nutritionals, LLC


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