Barclays Group’s total pension deficits increased by £1.1 billion in 2012, from £0.2 billion at 31 December 2011 to £1.3 billion at 31 December 2012.
In its Full year 2012 results, the banking group said this reflected recognised assets of £2.1 billion and unrecognised actuarial losses of £3.4 billion.
Barclays Group’s main pension scheme is the UK Retirement Fund (UKRF). At 31 December 2012, the UKRF had £2.2 billion assets, down from £1.7 billion in 2011. On an IAS-19 basis, the scheme liabilities exceeded the assets by £0.8 billion. According to the bank, the main reason for the change in funding status over the year was a fall of corporate bond yields relative to inflation of around 30 basis points.
The latest triennial funding valuation of the UKRF, which was carried out in September 2010, showed a deficit of £5 billion. As part of an agreed funding plan to eliminate the deficit, contributions of £1.8 billion were paid to the scheme in December 2011. A further £0.5 billion was paid in April 2012.
Further deficit payments will be payable from 2017 to 2021, starting at £0.7 billion for 2017 and increasing by approximately 3.5% per annum until 2021. These deficit contributions will be made on top of the regular contributions to meet the group’s share of the cost of benefits accruing each year.
The latest annual funding update, prepared by the scheme actuary on 30 September 2012, showed a funding deficit of £3.6 billion, following the payment of contributions in December 2011 and April 2012.