I thought ‘carrying value’ is net of provisions? Which would imply the “resulting in a loss on disposal of € 0.3 billion” refers to a loss you would likely make if you should the asset to a third party today? In this context the following sentence “The discount levels of the transfer were in line with the levels assumed as part of AIB’s PCAR exercise in 2011” may actually refer to the expected value AIB would receive in a ‘deleveraging’ sale.

I also note they refer to this as the ‘first contribution’ which implies there will be more. Nevertheless at least we’ve got more numbers! It would be useful to clarify if the 1.1bn relates to the 700m and if the 700m is net of loss provision? Regardless, the 400m is still a lot more than … “AIB has provided € 124 million (31 December 2011: Nil) in respect of past service costs for those employees expected to opt for early retirement. This provision, which is included within pension scheme liabilities, represents the best estimate of the amount required to meet the additional past service costs of the early retirement scheme, based on currently known facts and expectations. In addition, the curtailment gain/loss arising from the voluntary severance programme has been estimated to be Nil at
30 June 2012, based on known facts and expectations at this date.”

http://www.aib.ie/servlet/BlobServer/document.pdf?blobkey=id&blobwhere=1345654744827&blobcol=urlfile&blobtable=AIB_Download&blobheader=application/pdf&blobheadername1=Content-Disposition&blobheadervalue1=document.pdf

Page 118 indicates that the €1.1bn is being provided in two or more tranches. The first tranche of €0.7bn has been made and that had a net value of €0.4bn.

“Pension Scheme Contribution
AIB entered into a Contribution Deed on 31 July 2012 with the Trustee of the AIB Defined Benefit Scheme whereby it agreed to make
contributions to the scheme in order to enable the Trustee to satisfy the funding requirements of the Pension Scheme in 2012.
The first contribution, amounting to € 0.4 billion has now been completed. This was settled by loans and receivables transferred to the
pension fund with a carrying value of € 0.7 billion resulting in a loss on disposal of € 0.3 billion. The discount levels of the transfer were in
line with the levels assumed as part of AIB’s PCAR exercise in 2011.
The assets transferred were scheduled for deleveraging in the Group’s Non-Core portfolio, and were held in the statement of financial
position at 30 June 2012 as ‘disposal groups and non-current assets held for sale’.”

The inconsistency of data made public is amazing. PTSB disclose the transfer value. Whereas with AIB, we’re told the ‘nominal value’ of assets moved is c.1.1bn. But the current market value is different but COMMERCIALLY SENSITIVE. From AIB’s interim 2012 report we see: ‘Arising from the specific terms of the voluntary severance programme which includes an early retirement scheme announced on
21 May 2012 (note 32), AIB has provided € 124 million (31 December 2011: Nil) in respect of past service costs for those employees
expected to opt for early retirement. This provision, which is included within pension scheme liabilities, represents the best estimate of
the amount required to meet the additional past service costs of the early retirement scheme, based on currently known facts and
expectations. In addition, the curtailment gain/loss arising from the voluntary severance programme has been estimated to be Nil at
30 June 2012, based on known facts and expectations at this date.’

So is the current mkt value of assets transferred eur124m? It also begs the question ‘what types of assets were transferred’? i.e. Can a pension fund manage bank loans.

this AIB pension deficit stinks more and more,

Seriously.