Whitbread is to defer pension deficit top-up payments for three years after announcing its pension fund shortfall has risen to £388 million in its triennial valuation.
The leisure group, which has announced its underlying pre-tax profit for the year to 26 February is up 12% at £228m, has struck a deal with its trustees to defer £40m of pension payments until 2011. At this point, it will increase its contributions to £55m a year until 2013, then inject a further £360m until 2018 to repair the deficit.
The group, which employs more than 33,000 employees across its hotel, pubs and restaurant estates, has also agreed to grant security over £150m of its property assets.
The deferred pension payments were announced as Whitbread revealed its fund deficit had ballooned from £3m last February to £233m two months ago. It is the latest in a long line of employers to reveal sharply rising pension deficits amid ongoing market volatility.