UK – Chemicals firm ICI says its net liabilities across all its pension funds at the end of 2002 were 688 million pounds or 1.05 billion euros, under the new FRS17 accounting standard. The figure includes a tax credit of 126 million pounds (192 million euros).

ICI also made a special top-up payment of 30 million pounds (45.7 million euros) into its fund.

Of its funded schemes, the company’s UK pension fund was 257 million pounds in deficit, against a 161 million pound shortfall at the end of 2001. Its other funded pension schemes were 307 million pounds in deficit, from a 115 million pound deficit in 2001.

Its unfounded schemes’ total deficit was 250 million pounds, up from 235 million pounds a year earlier.

ICI as a business saw pre-tax profit rise 6% to 88 million pounds in the fourth quarter.

Finance director Tim Scott told journalists that ICI’s UK fund is around 75% invested in bonds.

Ratings agency S&P said the rising funding gap would not affect the ratings or outlook on the company.

But it said: “Weak equity markets during fiscal year 2002 had an adverse effect on the value of ICI's pension plan assets, and Standard & Poor's believes this could possibly result in higher annual top-up funding requirements in the U.K. in 2003 and thereafter.”