Support services group Interserve (IRV) has announced it will sell its remaining private-finance initiative (PFI) assets into its own pension fund in January next year. The portfolio consists of 19 PFI assets valued at £55m, and the deal will see the pension deficit reduced from £150m to £90m.
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More importantly for next year's results the assets generated £3.7m out of Interserve's £67m reported pre-tax profits last year. But this should be more than offset set by the increased returns from cash funds which can now go to investment in the business rather than funding the pension deficit. The annual cost of funding the scheme in cash terms has been halved from £23m, to £12m a year.
