FSA uses broker fees to fund pension deficit
In the FSA’s Business Plan for 2006/7 the regulator will use £3.7 million generated by the fees charged to regulated firms to reduce the deficit on its final salary pension scheme.
It says: ‘We calculated that our funding deficit at 31 March 2005 was £35m. In 2004/05, we budgeted for a £5m contribution and subsequently made a £6.7m contribution. In 2005/06 we propose to use the unplanned additional income generated in excess of our published annual funding requirement (AFR) to fund both the tax liability on our interest income and an increase in our pension deficit payment from a budgeted £6m to an estimated £9.7m.
‘We would expect to continue to make significant contributions for some years, and will continue to review the level of such contributions annually until the deficit is eliminated.’
Robin Gordon-Walker, spokesperson at the FSA said: “Every company in the UK has a pension deficit, and it needs to be brought down. We received £3.7 million more in fees from regulated firms in 2005. We found it the most sensible option to use this to reduce the deficit. The money has to come from somewhere.”
But John Stewart, director of PMI Independent Financial Advisers, said: “This is enough to make me wretch. The money should go back into helping our businesses. I’m happy to contribute, but not towards paying their pensions.”
Kevin Morgan, managing director of Consilium Financial Planning, said: “This is just wrong. In today’s climate where fees are forever going up, the money should be reinvested back to us.”