City watchdog reveals £102m pension fund gap

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The Financial Services Authority yesterday revealed a £102m hole in its pension fund, forcing it to increase contributions by about £2.5m a year.

The deficit, measured according to FRS17 accounting standards, came as it emerged that Sir Howard Davies, chairman of the FSA, has accumulated a total pension pot worth £952,000, a 21 per cent increase on the previous year.

Sir Howard, who steps down in September, was also paid £385,730 during the year to the end of March, including a £30,000 performance-related bonus. This was a 1.6 per cent increase on the £379,740 he received the previous year, the regulator's annual report said.

John Tiner, the FSA executive responsible for consumer protection and a prime candidate for the chief executive post, saw his total package rise 22 per cent to £362,000.

The FSA spent £203m last year, up from £194.5m. It is forecast to cost companies £215m this year. The City regulator said it could finance the extra pension payments it will have to make by increasing the levy it makes on companies. But it stressed it did not envisage having to hike up the annual charge it imposes on companies, as it believed its pension deficit was closer to £50m on a more realistic accounting basis.