Insurer agrees to pay into struggling schemes and seek cost cuts
Royal & SunAlliance (R&SA) is facing bills of up to £122m to repair pension scheme deficits.
The insurer has agreed a programme of payments, to be made this year.
It has also agreed to raise its ongoing contributions to between 20% and 23% of staff salaries and make back payments to last year.
R&SA UK human resources director Mandy Perrin told staff this level of contribution was a "very substantial increase" over its past costs.
The company is now in talks with unions as it tries to find ways to save costs.
It has shut the schemes to new members and sought to reassure existing members their pensions were safe.
Falling stock markets have dented the values of two of R&SA's final salary schemes.
The schemes' values will have fallen even further since their valuations last year and the company has agreed to revalue them next year, 12 months ahead of schedule.
The group, which reports annual results today, was hoping to reassure investors concerned about its pension liabilities.
In an internal memo to scheme members, Perrin stressed the company did not plan to close the schemes to existing members.
She said: "However, we must keep in mind always the significant cost of providing this benefit. Against this background, therefore, we are currently working together with employee representatives to find ways to ensure that we can achieve our shared aspiration."
UK communications director Paul Atkinson said R&SA's extra payments would not have to equal £122m. The schemes would also benefit from investment returns, reducing the amount needing to be repaid.
