Goldman Sachs Group Inc.’s pensions buyout unit, Rothesay Life, mistakenly told U.K. regulators it had entered into derivatives contracts valued at 151 billion pounds ($241 billion), Businessweek says.
The bank overstated the position by a factor of a thousand in its annual return to the Financial Services Authority, signed by the unit’s chief executive, Addy Loudiadis, and audited by PricewaterhouseCoopers LLP. The unit has 151 million pounds of inflation and interest-rate swaps outstanding, spokeswoman Fiona Laffan said by e-mail today. The firm told the FSA about the typographical error after filing in March and wasn’t required to resubmit it, Laffan said. PwC declined to comment.
Goldman, which set up Rothesay in 2007, manages about 4.3 billion pounds of pensions liabilities for companies including British Airways and RSA Insurance Group Plc. Firms such as Rothesay promise to pay pensions if retirees live beyond a certain age. They typically receive a portion of the pension plan’s assets in return and try to hedge the risk they take on with derivatives….
Read more at: http://www.businessweek.com/news/2011-06-24/goldman-sachs-unit-misstates-242-billion-of-pension-derivatives.html
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