RBS 2014 Annual Report Download - page 82

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80
RBS – Interim Results 2015
Notes
5. Provisions for liabilities and charges (continued)
Regulatory and legal actions
RBS is party to certain legal proceedings and regulatory and governmental investigations and continues to
co-operate with a number of regulators. All such matters are periodically reassessed with the assistance of
external professional advisers, where appropriate, to determine the likelihood of RBS incurring a liability and
to evaluate the extent to which a reliable estimate of any liability can be made. Additional charges of £1.2
billion in H1 2015 include anticipated costs following investigations into the foreign exchange market (£334
million), provisions in respect of mortgage-backed securities related litigation (£506 million), provisions
relating to packaged accounts (£157 million) and other conduct provisions (£160 million).
6. Pensions
Pension costs for H1 2015 amounted to £286 million (H1 2014 - £279 million; Q2 2015 - £138 million; Q1
2015 - £148 million; Q2 2014 - £137 million). Defined benefit schemes’ charges are based on the actuarially
determined pension cost rates at 31 December 2014.
In May 2014, the triennial funding valuation of The Royal Bank of Scotland Group Pension Fund was agreed
which showed that the value of the liabilities exceeded the value of assets by £5.6 billion at 31 March 2013,
a ratio of 82%. To eliminate this deficit, RBS will pay annual contributions of £650 million from 2014 to 2016
and £450 million (indexed in line with inflation) from 2017 to 2023. These contributions are in addition to
regular annual contributions of approximately £270 million in respect of the ongoing accrual of benefits as
well as contributions to meet the expenses of running the scheme.
Full details of RBS’s pension arrangements are set out in Note 4 on pages 367 to 372 of the 2014 Annual
Report and Accounts.