UK - Royal Bank of Scotland has revealed it has an overall pension deficit on its schemes of £2.91bn (€3.25bn). Meanwhile, Deloitte's pension deficit has more than trebled to £234m and Royal London has appointed an investment adviser for its £1.7bn scheme.

Figures in the 2009 annual report and accounts from RBS showed the largest pension liabilities lie within the main Royal Bank of Scotland Group Pension Fund, which closed to new entrants in 2006.

At the end of December 2009, this scheme had assets of £16.6bn and liabilities of 318.7bn on an IAS19 accounting basis, resulting in a deficit of £2.1bn. This contributed to a combined deficit for all of the DB schemes operated by RBS of £2.91bn. This overall deficit is an increase of almost £1bn on 2008, when the deficit stood at £1.996bn.

The report said RBS therefore expects to pay £746m in contributions to its DB schemes, of which £414m will be directed to the RBS Group Pension Fund. However, this fund will have its triennial valuation at 31 March 2010 and it is expected that the results will show a higher deficit again, so the firm could be required to further increase in contributions in 2010.

The report noted the increase in the pension deficit, which it partly attributed to actuarial losses of £4.38bn, was partially offset by "curtailment gains of £2.1bn due to changes in prospective pension benefits". In November 2009, the bank said it planned to cap future salary increases to the lower of 2% or the rate of inflation for the main RBS Group Pension Fund and on a number of other DB schemes in the UK and Ireland. (See earlier IPE article: Ulster and RBS salary cap plans ignite unions)

Elsewhere, the UK arm of consultancy firm Deloitte reported a pension deficit of £234m in its DB pension schemes at the end of May 2009.

This is approximately 3.5 times higher than the £67m deficit recorded in 2008, as the pension funds suffered a total actuarial loss of £183m. This left the value of combined assets of the main UK scheme and a small £52m scheme for employees based in Switzerland at £387m while liabilities escalated to £621m.

Deloitte said in the report that it expects to pay contributions of around £23m to the schemes in 2010, which includes payments for both future accrual and to help eliminate the deficit.

And the Royal London Group Pension Scheme has appointed Lane Clark & Peacock as investment adviser to its £1.7bn pension scheme.

LCP will provide strategic investment advice to the trustees of the fund, which has over 25,000 members, including guidance on the range of investments available to the scheme.

Richard Balding, chairman of RLGPS trustees, said: "We are looking forward to working with the LCP team. We were particularly pleased with their practical approach to potentially complex investment problems."

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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