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Distributor plans to revive pension plan with whiskey

When the pension fund was found to be

When the pension fund was found to be $1.3 billion in the red, it seemed time for a stiff drink for Diageo, a British alcohol distributor. Instead the company has plan to use maturing whiskey to plug a deficit. (Undated) Photo Credit:

LONDON - Diageo Plc, the world's largest producer and distributor of alcoholic drinks, is using maturing whiskey to plug a deficit in the company's pension plan.

London-based Diageo said Thursday that it will establish a pension funding partnership with a trustee, generating an estimated $37 million each year for 15 years -- using maturing whiskey spirit as collateral.

At the end of the period, the trustees will be able to sell the spirit back to Diageo for a maximum of an estimated $644 million.

The company is also transferring $75 million directly into the plan, with an additional $220 million held in an escrow account.

The move to use whiskey assets follows a review of the pension fund last year that identified an $1.3 billion deficit.


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