RBS will contribute £5.1 billion ($8.6 billion) to its defined benefit plan over the next 10 years, the bank said Friday.
The company already makes regular annual contributions of about £270 million to the Royal Bank of Scotland Group Pension Fund, Edinburgh, covering ongoing accrual of benefits and to meet the expenses of running the plan.
It said it will pay additional annual contributions of £650 million from 2014 to 2016, which will then drop to £450 million from 2017 to 2023. These contributions will be indexed in line with inflation, the bank said in a statement.
The additional contributions are based on figures as of March 31, 2013, when liabilities outstripped assets of £25.7 billion by £5.6 billion, giving a funding ration of 82%.
As of Dec. 31, the pension plan had a £2.7 billion deficit with a funding ratio of 90%. Pension fund assets totaled £25.7 billion as of June 30.
A spokesman for RBS declined to comment. Executives at the pension fund could not be reached for comment by press time.
