"GKN returned to profit in the year’s first quarter with its best performance since the start of the recession. The engineer reported a 50 per cent increase in automotive sales to £852 million and a trading profit of £51 million, compared with a trading loss of £47 million in the first quarter of last year.The idea seems ingenious but I have this nagging doubt in the back of my mind that there's a fatal flaw somewhere along the way. Can any of IP Finance's tax-savvy readers help?
The company, which has cut three dividend payments and made 7,000 staff redundant since the start of the downturn, also said that it would address its £510 million pension fund deficit through a radical plan to direct licensing income from its own name into the defined-benefit scheme. ...
The next triennial review will be completed by the end of the year, but the latest gross deficit figure for the scheme is £510 million. To try to close that gap, GKN has agreed with the pension fund trustees to create an asset-backed cash payment scheme that will put £30 million a year into the pension fund for 20 years.
Cash currently payed by GKN businesses around the world to use the GKN trademark — in effect, an internal licensing fee — will be channelled into the pension scheme. This will be supplemented by rental income from five of the company’s UK properties. The asset-backed cash payment scheme has been valued at £331 million.
Wednesday 28 April 2010
Revenue from internal TM licensing to swell GKN pension pot -- or will it?
From today's Times Online, courtesy of Lee Curtis (Harrison Goddard Foote), comes this article entitled "GKN’s trademark transformed into revenue stream for pension scheme". According to the article,