accountant and shipping adviser Moore Stephens has warned that the latest
valuation relating to the post-1978 (new) section of the Merchant Navy Officers
Pension Fund (MNOPF) will place further financial strain on shipping companies
involved in the scheme.
the valuation, the MNOPF trustees reported a funding shortfall as at 31 March
2012 of £492m. Although this is less than had been anticipated, it nevertheless
represents an increase of £152m (discounted to £120m) on the deficit recorded
in the 31 March 2009 valuation.
eliminate the funding shortfall, the trustees have called for additional
contributions with a present value of £120m as at 31 March 2012 under a
recovery plan beginning from 30 September 2013 and ending on 30 September 2025.
There is a payment by instalment option, but companies with a deficit of more
than £250,000 will have to submit to a new credit assessment in order to
qualify for this.
contributions for existing members are also increasing, from 15.5 per cent to
20 per cent, while active member contributions are going up from 9.5 per cent
to 12.2 per cent.
Simms, a partner with the shipping group at Moore Stephens, says, “These
changes will come as a further body-blow to companies which have been under
severe financial pressure for the past five years due to the global financial
downturn and the combination of declining freight rates, increased competition
and higher operating costs in the shipping industry. In addition to the principal sums required,
companies will also have to factor in the cost of their accounting requirements
and assess the impact on loan covenants and other banking arrangements. For
those opting to pay by instalments, meanwhile, there is the additional cost of
undergoing a new credit assessment, which is not insignificant. For shipowners
already struggling to keep their heads above water, these increased pension
costs represent an unwelcome, if not entirely unexpected, additional financial
Moore Stephens LLP is noted for a number of industry specialisations and is
widely acknowledged as a leading shipping and insurance adviser. Moore Stephens
LLP is a member firm of Moore Stephens International Limited, one of the
world's leading accounting and consulting associations, with 624 offices of
independent member firms in over 100 countries, employing 21,224 people and
generating revenues in 2012 of $2.3 billion.
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Labels: MNOPF, Moore Stephens, pensions shortfall