UK - The Financial Services Compensation Scheme has reported a £1.2m pension fund deficit after only its first full year in operation.
FSCS took over responsibility for compensation on December 1, 2001, to act as the fund of last resort for customers of authorised financial firms.
Its £1.2m pension scheme deficit for the year to the end of March compares with a £90,000 surplus 12 months earlier.
The deficit is a further sign of how financial services bodies are not immune to the problems facing the sector.
The Financial Services Authority has already reported a scheme deficit of £102m.
But FSCS said normal contributions are not expected to increase in 2003-04 prior to the next formal scheme revaluation.
FSCS chief executive Suzanne McCarthy said: “FSCS appreciates that its success is very much dependent on its staff. Our high retention rate of around 94% is a good indicator of our staff’s commitment.”
*The FSCS annual report reveals it paid out £59.5m in compensation for pensions mis-selling, predominantly to financial advisers’ clients who had been wrongly advised to take out private pensions.
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