RBS agrees ‘final deficit contributions’ for £45bn scheme

first_imgRoyal Bank of Scotland’s office in London Royal Bank of Scotland (RBS) has agreed to pay up to £3.5bn (€4bn) to its UK pension scheme to plug the deficit and allow the fund to operate on a self-sufficient basis.The changes to £45bn defined benefit (DB) scheme would also allow the company to pay dividends or otherwise distribute cash to shareholders for the first time since before it was bailed out by the UK government.“Subject to normal market conditions, the trustee and RBS’s central expectation is that no further deficit contributions to the main scheme will be required,” the bank said in a statement today.The scheme, in turn, would run a lower-risk long-term investment strategy by gradually reducing its exposure to listed equities and “increasing its exposure to assets that give a greater certainty over cash flows, while continuing to develop its comprehensive interest rate and inflation hedging strategy”. “The outcome,” added RBS, “will be an investment portfolio that targets a lower, more stable return, increasing security for members and posing less risk to the RBS Group.”Under the agreement reached with the trustees, RBS will pay £2bn in the second half of this year. It will also pay up to £1.5bn in aggregate from 2020 in the event that it distributes cash to shareholders. This could include ordinary dividends, special dividends or share buybacks.RBS said it intended to pay the scheme “an amount equal to each such distribution”, subject to an annual cap on contributions of £500m and until the £1.5bn had been paid.The UK’s Pensions Regulator has repeatedly called for employers to strike a balance between the money distributed to shareholders through dividends and contributions made to reduce DB scheme deficits.As at 31 December 2015, the pension fund, which has been closed to new members for more than 10 years, had a deficit of £5.9bn. The bank made a £4.2bn contribution to the fund in March 2016, which was estimated to have bumped up the funding ratio to 99% as at the end of 2016, according to the fund’s latest annual report.Ewen Stevenson, chief financial officer of Royal Bank of Scotland, said: “With these proposed payments, together with the one-off contribution into the fund in Q1 2016 we will have substantially addressed the historical funding weakness that existed in the fund and brought clarity to future funding arrangements.“For our shareholders, this [agreement] represents a further important milestone towards the resumption of capital distributions.”Ring-fencing decisionThe new funding contributions were agreed with trustees in a deal intended to pave the way for a restructuring required under UK law and to constitute the settlement required for the latest triennial valuation.This was brought forward from the end of December 2018 given that discussions between the employer and the trustees were already underway in connection with the restructuring required under ring-fencing legislation for UK banks.This, according to RBS, would entail a loss of employer covenant because certain RBS entities currently supporting the DB scheme would cease to do so.RBS decided that its main DB scheme would be sponsored by its ring-fenced business, which does not include the investment banking arm. By the end of March next year, the investment bank Royal Bank of Scotland plc – to be renamed NatWest Markets – and another entity would no longer be participating employers in the main DB pension fund and their liabilities would have been assigned to National Westminster Bank, RBS said.Employees within these entities would be transferred to new sections of the RBS group pension fund that would sit outside the ring-fenced bank. Earlier this year Barclays was criticised for its plan to link its DB fund to its investment banking arm.last_img read more

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Irvine: Berahino is on right track

first_imgWest Brom head coach Alan Irvine has told Saido Berahino to carry on scoring – despite his latest controversy. Press Association “I have said all along – and I don’t know how many interviews we have sat here talking about it – for any young player it’s important they make the right decisions and choices. Saido has been doing that,” he said. “I can’t judge this instance at this time but I will repeat what I have said many times before and that is, if he continues to make the right decisions he will have a really fantastic future.” The 21-year-old was also called up to the England squad for the first time this month, although did not play against Slovenia or Scotland, though Irvine insisted his arrest was not an issue. “I don’t think there’s any link there,” he added. “Roy (Hodgson) picked Saido, which was great. Saido went along for the experience but in the end, for whatever reason, Roy chose not to play him.” And Irvine insisted this week’s news had not disrupted their preparations for the Gunners. He said: “No it hasn’t been. He didn’t train on Tuesday but trained on Thursday and trained very well. It’s not made any difference, everyone has got on with it which I would expect them to do.” But Berahino is available to face Arsenal at The Hawthorns on Saturday and Irvine wants the eight-goal hitman to continue scoring. He said: “It’s the best way for any footballer to be in any game. “If Saido plays as he has done for most of this season we will all be delighted. “I’ve had a football chat with him and as far as I am concerned his head is in the right place and he’s certainly trained very well. He scored a whole load of goals.” Berahino was stopped for travelling at “high speed” on the M6 motorway on October 22 and, when officers spoke to him, he was arrested on suspicion of drink-driving. He was bailed and is due to return to a Cheshire police station next month, although a date is yet to be fixed. Last season, he was involved in a dressing room bust-up with team-mate James Morrison and was also caught on video inhaling legal high nitrous oxide. But Irvine insisted he has no fears about Berahino’s behaviour. The striker was arrested last month for alleged drink driving with the club only discovering the news on Monday. Irvine found out when a club official contacted him while he was at Aston Villa’s 1-1 draw with Southampton, hours before the news broke. last_img read more

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Claudio Ranieri happy to see Jamie Vardy end goal drought against Stoke

first_img “We made a fantastic performance and I am very pleased with my players.” Stoke created very little. Kasper Schmeichel had to be alert when called on to make his only real save of the game just after the hour, batting away Joselu’s header to preserve Leicester’s lead. City will have to be much better when they travel to Anfield on Tuesday to try to overturn a first leg deficit and make it to Wembley in the Capital One Cup. Boss Mark Hughes does not think his players had the semi-final against Liverpool on their minds but he expects an immediate response from them. “Maybe subconsciously they did, but I hope not,” said Hughes. “But no, I don’t think so. It wasn’t a great day for us and we didn’t produce anything of note. We’re an honest group and this was just one of those days to forget, I think. “We are a lot better than we were able to show but that’s credit to Leicester, who work exceptionally hard and press you in all areas of the field. “We couldn’t deal with that and we couldn’t retain the ball in key areas of the pitch because of the pressure we were put under, which was disappointing. “You can’t win Premier League games if you don’t have a good number of players playing really well, which we didn’t have. “We needed to be better but we’ll be looking to bounce back quickly – we have managed to do that more often than not. We have a huge game on Tuesday and I expect my team to respond very quickly.” During his six Barclays Premier League matches without a goal Vardy has been typically industrious, buzzing around opposition defenders and not allowing them time on the ball, despite h is fitness being tempered earlier this month by a minor groin operation. It was the same against Stoke and if the 29-year-old’s confidence had been affected by his recent lack of goals, he showed no signs of it as he calmly rounded goalkeeper Jack Butland, after latching on to Danny Drinkwater’s pass, before rolling the ball into the net from a tight angle. Leicester boss Claudio Ranieri had been telling Jamie Vardy that if he continued to work hard then his goal drought would end – and he was proved right on Saturday. It was Vardy’s 16th goal of a prolific season but his first since December 14. However, it was never an issue for Ranieri. “It was not a problem,” said the Italian. “Jamie I tell every day it is not important, although I know goals for the strikers is important and maybe now he has more confidence, and when I speak with him I say it is important you continue to work hard because you are the main man and if you start to press then everyone follows. “Then sooner or later you score a goal, I tell him this. You have to work and make it happen and then the goal will arrive.” Drinkwater and substitute Leonardo Ulloa scored either side of Vardy’s goal as Leicester went top of the Premier League with a vital victory, with their next three league games being against Liverpool, Manchester City and Arsenal. “It was very important to be top of the league at the end of January because now February is a month that is very, very tough. Liverpool, Arsenal, City – it is unbelievable. But we are ready to fight,” said Ranieri. “Now the players will have three days off, to clear the minds. And when they come back we restart to work hard because the league for us is very exciting. “You know how much I love the clean sheet but it was also very important to score the three goals because Stoke City is a very good team – solid, strong and taller than us. The first half was very difficult but fortunately we find the goals. Press Associationlast_img read more

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