UK - The total pension deficit at Barclays has widened by more than £1bn (€1.3bn) in the first half of this year largely due to actuarial recalculation, according to the bank’s interim report for 2012.
The IAS 19 pension deficit across all schemes grew to £1.3bn at the end of June 2012, from £0.2bn at the end of 2011.
This reflected net recognised assets of £2.0bn, up from £1.5bn at the end of December, and unrecognised actuarial losses of £3.2bn - up from £1.7bn, Barclays said in its January to June 2012 report.
These net assets comprised retirement benefit assets of £2.5bn and liabilities of £0.5bn. These two figures compare with the £1.7bn and £0.3bn reported six months earlier.
The main Barclays pension scheme - the UK Retirement Fund - slipped into deficit in the first half of the year. At the end of June, the UK scheme’s liabilities exceeded the £2.2bn of assets recognised on the balance sheet by £700m, on an IAS 19 basis, after a surplus of £300m reported at the end of December.
Barclays said: “The most significant reason for the change in the IAS 19 position was a reduction in the net discount rate, driven by falls in AA corporate bond yields, partially offset by the deficit contribution paid over in the year.”
Barclays said it was changing the way its accounts were calculated.
The current interim results were prepared using IAS 34 Interim Financial Reporting, but from January 1, 2013, the group would adopt IAS 19 employee benefits revised.
This would remove the ability to defer actuarial gains and losses as part of its pension assets and liabilities, among other changes, it said.
In other news, the Pension Insurance Corporation (PIC) announced it has hedged £300m of longevity risk through reinsurance with Munich Re.
The bulk annuity provider said this followed a £500m reinsurance transaction with other global reinsurers announced in January 2011.
The company said it had now reinsured around 65% of its longevity exposure, which represented around £3.5bn of its total liabilities.
Rob Sewell, chief financial officer, said: “Our strong new business performance so far this year demonstrates the very high demand for defined benefit pension insurance solutions, even against a difficult macro-economic environment.
“It is vital that we maintain our focus on securing our existing policyholders’ pensions for the long-term and this reinsurance transaction helps to further protect us against the very long-dated risks we face,” he added.
The company recently completed the year’s largest bulk annuity deal worth £320m.