The company explained in a statement that as a result of the merger, the net present value of its deficit repair contributions could reduce to £175m-£185m from the current £300m-£320m.

The intention is for the three sections of the new scheme to be segregated and run separately until the RHM scheme buyout in three to five years’ time.

Commenting on how the scheme-specific funding regime limits the amount of scheme mergers that can go ahead, Eleanor says: “They do still happen, particularly on a segregated or ringfenced basis, which is what Premier Foods have announced. Under this approach the schemes are combined under one trust ‘umbrella’, with one trustee board and scope for significant administrative savings.

“However, they remain separate for funding and related purposes, which means separate actuarial valuations, and that those that are less well-funded can’t benefit directly from another of the schemes doing better.”

Read the full piece in Pensions Expert here.