Employee Rewards and Benefits News
Pension deficit of FTSE 100 companies doubles
The end of November signalled a heightening of pension deficits among FTSE 100 companies, according to new research from a consultancy.
Towers Perrin discovered that defined benefit (DB) pension deficits reached £72 billion by the end of November, meaning that it is double the figure recorded at the beginning of the year, when it stood at £36 billion.
Future inflation rates were attributed with the losses, with the firm noting that market-based inflation predictions markedly rose during 2009.
The FTSE 100 pension deficit would be quantified at £31 billion - £41 billion less than the current level - if inflation expectations at the moment were the same as they were at the beginning of this year, Towers Perrin added.
Head of pensions at the firm Mark Duke said: "There are many different views about where inflation is heading. Employers may want to resist putting cash into pension plans now based on inflation rates that they believe will not be reached."
This week, the National Association of Pension Funds said that government support of a more accessible gilts system was demanded by 82 per cent of people interviewed in a recent survey.
Posted by Peter Chad
