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Irony of ironies, the Financial Services Authority is considering closing its final salary pension scheme. According to reports, the City's uber-regulator is considering a number of options to deal with a £31m shortfall in its pension plan - revealed by FRS 17.

According to one report one option is a hybrid scheme where a final salary pension is capped so not all future salary increases are reflected in an employee’s pension. So a 5% salary rise might only equate to a 2.5% rise in pensionable salary, with the balance invested in a defined contribution pot.

Of course the FSA is not alone. The Confederation of British Industry has railed against FRS 17, with the likes of British Airways reporting large deficits under the standard. It’s not all been one way traffic though. The British Airports Authority and steel giant Corus have reported surpluses.

There was some good news for industry last week, however. The Accounting Standards Board has offered a reprieve for companies – they won’t have to implement the new rules in full. For now.

So is the FSA’s thinking – to be confirmed in the autumn – a fudge or a full solution? We’ll reserve judgment if you don’t mind until the equity markets start galloping away into positive territory again.

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