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Northern Rock pension fund could be pushed £100m 'into the red'

15 January 2008 / by None
The Northern Rock pension fund is likely be pushed £100 million into the red due to the crisis at the bank, its trustees have said in a statement.

In the wake of the crisis, the trustees sold shares worth 50 per cent of the scheme's investment and transferred the money into government bonds, the BBC reports.

However, although safer, bonds provide lower returns which could result in a significant deficit, the report continues.

The trustees have stated: "A deficit - although it may appear alarming - does not represent any immediate risk to the payment of benefits; these continue being paid as normal."

Commenting on the request for the financial authorities to guarantee a potential deficit, John W Watson, one of the trustees said: "I don't think it needs to be a problem."

In related news, Gordon Brown has hired corporate trouble-shooter Ron Sandler to help rescue Northern Rock, the Daily Telegraph reports.

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