Only three of the top 100 firms now offer final salary schemes
|
Britain's leading companies have seen their pension schemes plummet in value over the past year, a report has found. Consultants Lane Clark & Peacock (LCP) said firms listed in the FTSE 100 stock index had a combined deficit last month of £96bn - the largest on record. This compared with a £41bn deficit in mid-July 2008 and a surplus of £12bn in the same month of 2007. LCP warned that the growing deficit meant even more final salary pension schemes were likely to close. Last month the Pension Protection Fund (PPF) calculated that all the the UK's 7,400 defined benefit schemes had seen their collective deficit rise to £200.1bn by the end of May. BBC business reporter Brian Milligan said the main reason for the fall in value of pension scheme assets was a drop in share prices. He added that just as markets had begun to recover, bond yields had collapsed, making pensions more expensive to fund. 'Uncertain future' LCP's Accounting for Pensions report said the fallout from the collapse of Wall Street giant Lehman Brothers in September 2008 had hit pension scheme assets particularly hard. Only one of the top 100 companies - BP - still offers a final salary pension scheme to new members, the report said, adding that more closures of final salary schemes were expected. BP has recently announced its intention to close its scheme to new recruits. The report also said the FTSE 100 share index would need to rise from its current level of just over 4,600 to more than 7,000 to wipe out the deficits entirely. Bob Scott, partner at LCP, said that because the outlook for the economy and financial markets remained unclear, pension scheme finances would face more uncertainty. He added: "Those companies which work with their pension scheme trustees to identify and reduce pensions risk will be better placed to weather any future financial storms than those which fail to act." Barclays and supermarket group Morrisons are among those companies that have recently closed their final salary pension schemes.
|
One-Minute World News
E-mail this to a friend
Printable version
BBC News
Bookmark with:
What are these?