Alcohol may damage the brain but a few smart people at Diageo (the world’s largest premium drinks company) with a few brain cells between them have devised a novel way for the firm to meet its crippling UK pension obligations.

The group, with an estimated £875 million pension shortfall, will set up a pension funding partnership (PFP) to produce whisky that will mature over 15 years and then sell it back to the company for an amount expected to be no greater than the deficit at that time, up to a maximum of £430 million.

This structure is expected to generate an income to the UK pension scheme of £25 million a year for the term of the PFP.

This is a great idea for Diageo, but unfortunately only a few companies in Britain would be able to adapt such a plan themselves.

For the vast majority of businesses they are not in the business of selling products that increase in value as time passes – for most it’s in fact the exact opposite.

The majority of companies have to date invested through traditional asset management channels in a bid to boost the end pensions of its employees.

However, a combination of golden defined-benefit funds, under-performing investment classes, and increasing life expectancies has left many firms – not to mention governments – with gaping holes in their pension liabilities.

Diageo said the whisky being transferred into a “pension funding partnership” would be recently distilled and less than three years old.

It will be made up of the group’s whisky from 27 distilleries in Scotland, such as Talisker, Lagavullin and Oban.

As part of the deal, Diageo will pay £25m per year into the pension fund in fees which will give it options to acquire the whisky stock at any time.

The transfer of the whisky that will be less than three years old will cover between 2 million and 2.5 million barrels at any one point in time.

All in all, this equates to Diageo paying around £50m a year into the fund – something it has been doing anyway since 2007, but the company will now have a great deal of whisky to sell as a result.

This in turn will potentially be bought back by some of its pensioner ex-employees as they celebrate their golden years with the odd tipple.