RSA pension deficit drops 36%

RSA Insurance Group has cut the payments it makes to plug deficits in its two main pension schemes following a 36% drop in the schemes’ combined deficit.

As of 31 March 2012, the combined deficit of the Royal Insurance Group Pension Scheme and the SAL Pension Scheme was £442m, down from £692m on 31 March 2009.

Following the latest valuation, RSA has negotiated guaranteed deficit funding contributions of £61m a year to be paid in 2014, 2015 and 2016. This compares with contributions of £70m in 2012 and £63m in 2013.

The company conducts actuarial valuations of the schemes’ deficits every three years. A deficit occurs when the amount the scheme owes to its members exceeds its assets.

The company said the change would have no impact on its financial reporting.

RSA chief financial officer Richard Houghton said: “We are pleased to have worked with the trustees to agree a funding schedule which recognises the strength of RSA, our continuing commitment to support the provision of pension benefits to members and allows us to manage our pension risk and continue to de-risk at the appropriate time in the future.”

The main UK pension scheme trustees, Peter Webster and Keith Greenfield, said: “Both trustee boards are happy that the level of funding secured strikes the right balance between member security and the schemes’ interests in maintaining a healthy employer. The funding schedules are consistent with our fundamental objective of ensuring the schemes are able to meet their long term obligations.”