The chairman of the Barclays staff pension scheme has defended a deal that has allowed the bank to dramatically reduce and delay rescue payments to repair the shortfall in the scheme.
Peter Goshawk, a former treasurer at Barclays, said that the 248,000 members were protected as a result of the arrangement under which up to £9 billion of Barclays assets could be seized if it failed to meet promises.
He denied that the trustees had been too accommodating in allowing the bank to cut promised payments by £1.3 billion over the next four years. “I can assure you that by no means has the bank had an easy ride through this,” he said. “We have an extraordinary robust set of trustees.”
Barclays raised eyebrows when it revealed in its interim results last month that the shortfall in the fund, one of the biggest in the private sector with £35 billion of assets, had worsened from £6 billion to £7.9 billion, but that it been allowed to reduce payments.
It also said that the sponsor of the scheme would not be the entire bank but the non-ring-fenced part such as the investment banking division. After 2025 the pension fund will have no power to demand contributions from the ring-fenced part, which is protected. Mr Goshawk said he was able to make the concessions because it had agreed to provide a pool of assets as collateral. Last September the value of these would have been £7 billion, rising to £9 billion if the deficit worsened.
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Barclays has pledged contributions of £1.24 billion and then three payments of £740 million in the four years to 2020. These have been cut to £740 million and then three more payments of £500 million. The new schedule is heavily loaded to the 2021-25 period.