Ryanair Ltd. has wound up its Irish Defined Benefit Pension Scheme, eliminating an almost €10 million ($13.6 million) deficit from its balance sheet, confirmed a spokeswoman for the Dublin-based airline.
The company has agreed to fully fund the €9.7 million pension deficit. Ryanair will also pay an additional top up of €2.8 million into the fund to enhance transfer values. The spokeswoman declined to comment further on the nature of the arrangement.
An enhanced transfer value exercise is typically used by an employer to reduce pension costs and liabilities. An employer will offer employees a higher value than their benefit accruals in order to transfer them out of a pension fund.
The pension fund has 121 active members, covering less than 1.5% of the total employees, and was closed to new employees in January 2000. Those in the pension fund may join the Ryanair Defined Contribution Scheme. The size of the DC plan could not be learned by press time.
“With only 121 active members and a deficit of just under €10 million, the board of Ryanair believes that it is the appropriate time to wind up the DB scheme,” said Howard Millar, deputy CEO and chief financial officer, in a company announcement. “By fully funding the deficit, and providing an additional top up of €2.8 million to enhance transfer values, Ryanair has effectively eliminated pension liabilities from its balance sheet.”
The pension fund was frozen on Dec. 30.
