UK - Engineering giant Invensys has been accused of being "economical with the truth" over its true FRS17 position.
Invensys declared a combined FRS17 surplus of £137m, over liabilities of £4.6bn on its UK, US, and other schemes as at March 31.
But a City analyst claims the firm is being “economical with the truth” as the figures do not include healthcare for scheme members.
He explained that Invensys provides healthcare to approximately 20,900 scheme members and that if this cost was included in the calculations in March, then Invensys’s schemes would have had a deficit of £110m.
Invensys has admitted that its schemes have fallen into deficit since March due to a combination of falling markets which have cut the value of its equity holdings and falling interest rates, which have pushed up the value of its liabilities.
The analyst calculated that Invensys’s combined pensions deficit now stands at around £700m.
In March, the scheme was 50% invested in equities, 45% in fixed income, and 5% in other assets.
In its preliminary report for November, Invensys said its next scheme valuation on April 5, 2003, will show the true state of its funding.Invensys was unavailable for further comment.
The Pensions and Lifetime Savings Association (PLSA) is in the process of convening an industry-wide group to take forward the work of the Institutional Disclosure Working Group (IDWG).
The Transfers and Re-registration Industry Group (TRIG) has given its support to an initiative which aims to complete occupational pension transfers within three weeks.
Scottish Widows has completed a bulk annuity deal for the Hitachi UK Limited Pension Scheme.