17th Jul 2013 08:52
RSA announces completion of latest pension scheme valuations and agreement with Trustees on future funding
RSA Insurance Group plc (RSA) and the Trustees of its main UK pension schemes today announce that they have agreed the pension deficit funding contributions following the completion of the latest triennial actuarial valuations.
As at 31 March 2012, the main UK schemes, Royal Insurance Group Pension Scheme (“RIGPS”) and the SAL Pension Scheme (“SALPS”) were c93% funded on the prudent measure that the Trustees are required to use, with a combined deficit of £442m. This compares to a combined deficit of £692m at 31 March 2009.
Guaranteed deficit funding contributions of c£61m p.a. will be paid in 2014, 2015 and 2016. This compares with deficit funding contributions of c£70m in 2012 and c£63m in 2013.
In accordance with IFRS reporting, this agreement will have no impact on the financial reporting of the Group. The Group will adopt the new IAS19 Pension Accounting rules when it reports 2013 Interim Results on 1 August 2013.
Richard Houghton, Chief Financial Officer of RSA, commented:
“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.”
Peter Webster and Keith Greenfield, Trustee chairmen of the main UK pension schemes, added:
“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.”
-ENDS
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Notes to Editors:
In recent years, significant action has been taken to de-risk RSA’s UK pension schemes. This has meant that the schemes are in a much more stable, sustainable position. The de-risking activity included:
In 2002, closing the defined benefit schemes to new members and introducing employee contributions, In 2005, beginning to hedge market exposure via an extensive programme of interest rate and inflation swaps, In 2006, closing out all final salary liabilities for past service and moving to career-average revalued earnings (CARE) for future service, In 2007, reducing equity exposure from 46% to 28% by selling approximately £900m of equities In 2009, the group insured £1.9bn or just over half the pensions in payment with Rothesay Life, via a synthetic buy-in, thereby reducing the schemes’ exposure to longevity and market risk In 2010, retaining CARE with further reductions to future service benefits, increased employee contributions, increased retirement age and a cap on earnings eligible for defined benefitAbout RSA
With a 300 year heritage, RSA is one of the world’s leading multinational quoted insurance groups. RSA has major operations in the UK, Scandinavia, Canada, Ireland, Asia and the Middle East, Latin America and Central and Eastern Europe and has the capability to write business in over 140 countries. Focusing on general insurance, RSA has around 23,000 employees and, in 2012, its net written premiums were £8.4 billion.
Important Disclaimer
This press release may contain ‘forward-looking statements’ with respect to certain of the Group’s plans and its current goals and expectations relating to its future financial condition, performance results, strategic initiatives and objectives. Generally, words such as “may”, “could”, “will”, “expect”, “intend”, “estimate”, “anticipate”, “aim”, “outlook”, “believe”, “plan”, “seek”, “continue” or similar expressions identify forward-looking statements. These forward-looking statements are not guarantees of future performance. By their nature, all forward-looking statements are inherently predictive and speculative and involve risk and uncertainty because they relate to future events and circumstances which are beyond the Group’s control, including amongst other things, UK domestic and global economic business conditions, market-related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing impact and other uncertainties of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation or regulations in the jurisdictions in which the Group and its affiliates operate. As a result, the Group’s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in the Group’s forward-looking statements. Forward-looking statements in this press release are current only as of the date on which such statements are made. The Group undertakes no obligation to update any forward-looking statements, save in respect of any requirement under applicable law or regulation. Nothing in this press release shall be construed as a profit forecast.
Copyright Business Wire 2013
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