Earlier this month, The Times reported that the Co-op Bank has agreed to pump millions into the pension scheme of the Britannia Building Society.
The Bank’s pension trustees will be given £50 million over the next seven years, as well as placing a £137 million portfolio of top-rated mortgages or debt into a custodian account with another bank as security for the scheme.
The pension scheme became the responsibility of the Co-op Bank after its merger in 2009 with the building society. The agreement follows months of negotiations between the two sides and is the result of an April 2014 triennial valuation of the fund’s assets and liabilities.
Co-op Bank’s pledge to provide £137million security to the pension fund highlights continuing fears over the scale of the deficit. As well as mortgage-backed securities, the lender can also put in government bonds and debt rated AAA as a guarantee.