Rolls-Royce faces £35m hit for pension hole
Rolls-Royce, the aero-engine manufacturer, may have to take an earnings hit of £35m after it revealed a £700m hole in its pension fund.
Link: Read more on FRS 17
The news, revealed in the company’s interim statement yesterday, will add extra fuel to the FRS 17 pension accounting controversy, though the shortfall had been widely anticipated.
Under the rule, Rolls-Royce was forced to declare a £700m deficit under its main UK pension at 30 June, though the company maintained the ‘snapsot’ of market value of assets and liabilities was overstated.
Paul Heiden, Rolls-Royce’s finance director, has sought to ease concerns over the pension liability funding, saying the company would be able to afford the £35m hit.