UK – The UK’s main financial regulator, the Financial Services Authority, is putting almost £16m (€23m) towards shoring up a growing deficit at its £250m final salary pension fund.

The FSA said the contribution rate into the plan for 2005/06 was 23% of pensionable earnings plus £9.8m “as an additional deficit reduction contribution”. And there’ll be an extra £6m of contributions in 2006/07.

The watchdog said in its annual report released today that the deficit on the final salary section of the scheme had increased to £91.3m from £80.3m.

This was “largely as a result of a reduction in the corporate bond yield” which cost it £37.0m and increases in inflation assumptions (£16.4m) and life expectancy (£5.6m).

“These increases were partially off-set by strong asset returns, which produced an extra £38.8m over the amount anticipated,” it said.

Last week the Bank of England said it would pay £370m into its pension fund over the next decade. The bank's annual report revealed that the scheme had gone from a small surplus in 2002 to a £299m deficit last year.

The FSA says that the pension liabilities “will not crystallise for many years and, notwithstanding the large deficit currently reported, the Board believes that the FSA remains able to meet its liabilities as they fall due”.

It added: “The FSA continues to work with the Pension Scheme Trustees to secure the accrued pension benefits of employees through appropriate levels of funding and mitigation of the risks arising from the pension scheme.”

IPE reported yesterday that the Faculty and Institute of Actuaries made an extra £1.5m in additional contributions in the past year in a bid to erase a £3.6m deficit at their own pension fund.