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WH Smith has announced a move to safeguard its pension fund from future risks with the purchase of a bulk annuity insurance policy.

The trustee of the WH Smith Pension Trust took out the policy with Standard Life, insuring all liabilities to pay all future defined benefit pensions to the trust’s 12,950 members and any eligible dependants.

The insurance policy was purchased using most of the existing assets held within the trust, without the need for WH Smith to make any additional contributions.

As a result of this “comprehensive risk-removal”, WH Smith said it would not be required to make any future contributions into the trust regarding defined benefit liabilities.

The group added there would be “an immediate small benefit” to its cashflow and “a small reduction” in its liabilities.

“The purchase of the insurance policy follows a long period during which the trustee, with the support of WH Smith, has reduced investment, interest rate and inflation risks in the trust, and the funding level has improved,” WH Smith said in the statement to the London Stock Exchange this morning.

“The bulk annuity policy matches the trust’s cashflow benefit obligations to its members, removing longevity and other demographic risks as well as investment, interest rate and inflation risks.”

Shares in WH Smith jumped 0.8% to 1,464.5p as markets opened this morning on the back of the announcement.

WH Smith is set to issue a pre-close trading update for the year ended 31 August on 7 September.

Morning update

Elswhere, the markets are very quiet as the summer season gets into full swing.

The FTSE 100 opened 0.4% higher at 7,471.47pts.

Early risers this morning include Hotel Chocolat, up 1.9% to 138.6p, Coca-Cola HBC, up 1.4% to 1,937p, SSP Group, up 1.2% to 257.3p, and DS Smith, up 1.2% to 284.7p.

Glanbia, Just Eat Takeaway, Finsbury Food Group and McBride are all early fallers, down 5.5% to €11.28, 2.1% to 1,516p, 1.9% to 69.2p and 1.5% to 16.4p respectively.

This week in the City

Newsflow has slowed to trickle this week with earnings season for Q2 drawn to a close.

The latest retail sales figure for July is release tomorrow morning by the BRC and KPMG, while Barclaycard also reveals its latest spending data.

The big news of the week comes from Deliveroo, which files interims on Wednesday, while European Coke bottler Coca-Cola HBC also reveals its first-half results on Thursday.