Interim results - 6 months ended 30 June 2006
Operating and financial review
Pension fund deficit
As previously announced we are close to finalising our negotiations on the appropriate proportion to be borne by the UK with-profit funds. These funds could contribute up to 12% of the future deficit funding payments to the Norwich Union pension fund. Currently, substantially all of the deficit is borne by shareholders as historic contractual arrangements have, to date, meant no deficit funding has been recharged to the Group’s UK with-profits funds. At 30 June 2006 the Group’s overall pension fund deficit had reduced by £687 million to £784 million (gross of tax), benefiting from the favourable impact on the valuation of liabilities of a 30 basis point increase in real interest rates during the period. It remains our intention to make additional deficit funding contributions totalling £540 million by early 2008
