RBS contributes £2bn to pension scheme as part of MoU

The Royal Bank of Scotland (RBS) paid £2bn into the RBS Group Pension Fund’s main scheme in October 2018 as part of new ring-fencing legislation, its final results report has revealed.

In April 2018, RBS announced its intention to commit a total of £3.5bn into the scheme as part of a memorandum of understanding (MoU) that it signed with the scheme’s trustee, in an attempt to compensate for the loss of certain RBS entities as a result of the ring-fencing legislation.

In its report, RBS also reiterated its commitment to contribute a further £1.5bn into the scheme in January 2020.

As part of the MoU, NatWest Markets Plc (NWM) is required to make a contribution of £53m to the NWM section of the scheme.

NWM can no longer be a participant in the main pension scheme section and “separate arrangements are required for its employees”.

Furthermore, RBS has agreed to a £76m net settlement relating to the International Private Bank pension scheme.

Commenting on the report, RBS chief executive, Ross McEwan said: “2018 was a year of strong progress on our strategy - we settled our remaining major legacy issues, paid our first dividend in ten years and delivered another full year bottom line profit.

“However, while our financial performance is more assured, we know that a significant gap remains to achieving our ambition to be the best bank for customers. We are fully focused on closing this gap.

“In 2019, we will focus forward, into a rapidly changing market. We have set annual goals for 2019 based around our five priorities in order to keep up momentum on the delivery of our strategic plan.

“There are two areas in particular that we need to focus on - customer experience and simplifying the bank. This year we aim to spend £1 billion on upgrading legacy infrastructure, improving systems, processes and delivering new innovations which will improve our customers' experience.”

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