FSA provoke anger with pension clawback

Accusations of a lack of transparency and attempts to claw back pension deficits from the meat industry by the Food Standards Agency has provoked an angry reaction.

With some in the sector describing the FSA’s attempts to shed light on the direct and indirect costs of regulating the meat sector as “fantastically vague”, others are hitting out at the agency’s plans to recoup a pension deficit of £103m from industry.

The FSA revealed the costs during a meeting of industry stakeholders in York this week. Details of the costs are available here.

However, Ian Anderson, chief executive of the Scottish Association of Meat Wholesalers, said: “After years of striving to establish details of the overheads which are included in the FSA’s meat inspection charges, light has finally been shed on this issue.

”It was also revealed that the pension deficit element in the FSA’s proposed charges for 2011/12 is £4.7m. In addition, however, it’s still not clear what the FSA’s current pension contribution costs are or how the FSA intends to manage its future pension liability.

”Even without this information, the figures we already have are staggering and there is no rationale whatsoever for imposing this cost on the meat processing industry. 

“This is precisely why the FSA’s ‘Full Cost Recovery’ policy is totally flawed and extremely ill-timed and why the FSA Board should reject it out of hand when it meets to consider the policy on May 24.”

An FSA spokesman said: “It’s not news that the FSA has a pension deficit - it’s been in our published accounts since 2004/05. The FSA is being transparent about the costs of meat official controls and one of the significant items is the annual cost to the FSA of the pension deficit. For the year 2011/12 this is budgeted at £5.6m of which £4.7m relates to the cost of our work for industry and this would be the amount, under full cost recovery that we would charge industry.

“It’s important to remember that the pension deficit figure is variable and that the overall figure of £103million will be assessed again by the actuary and external auditors for the 2010/11 annual accounts. The amount is influenced by factors such as investment performance and life expectancy and is estimated according to criteria set out in treasury standards.”