Barclays Pension Shortfall Soars By A Further £1.1bn Despite Moves To Correct The Problem
BARCLAYS HAS SEEN its pensions shortfall shoot up by more than a billion pounds over the last six months, despite paying in £700m to cut the deficit.
Key Considerations
The bank’s half yearly report, published this month, reveals the deficit on an IAS19 basis grew from £200m to £1.3bn from December to June, Accountancy Age’s sister publication Proffesional Pensions reports.
The firm’s main scheme, the UK Retirement Fund moved from a surplus of £300m to a shortfall of £700m.
Barclays said the deterioration of the schemes’ funding levels was due to drop in the discount rate used to value liabilities, which was driven by falling yields on AA corporate bonds.
It revealed the bank had made deficit funding contributions of £1.8bn in December and £700m in April under a recovery plan agreed after the last triennial valuation in December 2010.
The plan requires annual recovery payments of £700m, rising by 3.5% a year, to be paid until 2021.
The 2010 valuation put the deficit on an actuarial basis as £5bn and an actuarial update as at 30 September 2011 showed a funding deficit of £6.4bn before the contributions in December.
What This Means For You
source: Accountancy Age
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