UK defined pension scheme to close in overhaul

Jardine Lloyd Thompson (JLT) is to overhaul its staff pension scheme in a bid to halt slowing revenue growth.

The broker said it would put in place a series of measures in an attempt to cut its £146m pension deficit.

The proposals include the closure of the UK's defined benefit scheme and an initial cash injection of £35m.

A further £30m would be put into the scheme by 2009.

The announcement came as JLT reported group pre-tax profits for the half-year of £48.6m - up from £48.1m a year earlier. Turnover for the year stood at £260.4m, up from £250.7m on the previous year.

On the news the broker's share price fell by 3.04% from 367.75p to 358.25p when Insurance Times went to press.

The broker's UK operations increased turnover just 7% to £23.4m, while its specialist wholesale businesses Lloyd & Partner and Agnew Higgins Pickering performed "strongly".

JLT Risk Solutions achieved a "stable" turnover of £61.2m but the division's trading margin dropped from 18% to 14%.

Trading margins also fell in the Total Risk & Solutions sector from 22% to 18%, turnover increased by 5% to £219.8m.

Neil Manser, insurance analyst for Fox-Pitt, Kelton, questioned the speed at which the restructuring at the company was taking place. "JLT is turning a corner, but is it quick enough?"

He said: "The entire industry is challenged because there are pressures on fees, rates are softening, and the value of the dollar is sliding. JLT has some dollar revenue with sterling overheads.

"That is a tough trading environment. We expect to see the outcome of its strategic review next year when, hopefully, profits will begin to rise."

JLT group chief executive Dominic Burke said: "Given the challenging trading environment, we do not anticipate any more than a modest overall improvement in the group's trading performance for 2006 from that reported for 2005."