The Bank of England is to review the future of its final-salary pension scheme after the emergence of a £299m shortfall in the fund.
The deficit in the bank’s pension fund was revealed after a three-yearly actuarial review of its retirement scheme detailed in its annual report, and published yesterday.
The fund was in surplus by £150m in 2002, but assumptions about the expected lifespan of scheme members and moves in the rate that is used to assess the fund’s liabilities have had a large impact, the bank said.
As a result of the shortfall, it has been forced to commit to rectifying the deficit through large annual payments over 10 years.
In the 2005-06 financial year just ended, and in 2006-07, the extra cost will amount to some £52.5m.
In each of these two years, this extra payment will take the bank’s total contibutions to its pension scheme to £84m, up from £7m in 2004-05.
The bank said that it was to review the future of pension scheme. “Like all employers at the moment, the bank is looking at pensions,” a spokesman told the Times. “No decisions will be taken until there has been a full, thorough and lengthy consultation with staff.”