Following its statement earlier this week predicting a better than expected full year, UK financial services firm HBOS has formulated a plan to fill in its pension gap to the tune of GBP1 billion.
The banking outfit, which includes the Halifax and Bank of Scotland units, said on December 5 that full year earnings would exceed expectations sending company shares up. Now the UK-based firm plans to make several contributions in the coming years, including a major initial investment in 2006, in order to sure-up its pension fund.
Currently the company has a shortfall of GBP1.8 billion in its pension provision according to international accounting rules. However, James Crosby, HBOS’s chief executive, said the bank would put aside the GBP1 billion by the end of this year to tackle the deficit.
HBOS hopes to have eradicated its pension shortfall within five years, although some industry analysts believe that the company’s radical plan could do the job in just one.