UK’s GKN sees “insignificant” FRS17 impact
UK – Engineering company GKN said the new FRS17 accounting standard would have had an “insignificant” impact on its profit and loss account if it had used the standard to calculate its current pension liabilities.
“The impact on the profit and loss account of adopting FRS17 would have been insignificant,” GKN said in a statement. “GKN has not benefited from abnormally low pension charges nor taken a pension contribution holiday in recent years.”
It accounted for its pension and post-retirement costs in its annual accounts using the SSAP24 standard. It said the total charge to profit of defined benefit schemes in 2002 was 49 million pounds (71.3 million euros), up from 42 million pounds in 2001.
It said its UK pension scheme, which has around 60,000 members, has a deficit of 415 million pounds after deferred taxation under FRS17.
In 2002, GKN’s total contributions to the fund were 33 million pounds, which it will raise to 53 million pounds in 2003 – “well within the cash flow and balance sheet capability of the group”.
The scheme’s next actuarial valuation on an SSAP 24 basis will take place in April 2003.