Top companies pensions deficits could disappear by year end

The
FTSE 100 could wipe out its overall pensions deficit by the end of 2004,
according to new research by Aon Consulting.

The
latest forecasts, based on estimates by investment banks, show a fall from
£65bn in December 2003 to £40bn by the end of 2004.

However,
if the market outperforms investors’ expectations, (if corporate bond yields
rise to 6.5 per cent by the end of December 2004 and the financial market hits
4725), the current overall pensions deficit for FTSE 100 companies should be
almost wiped out by the end of 2004.

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Paul
McGlone, principal and actuary at Aon Consulting, said that he remained
cautiously optimistic that the markets boded well for an end to pensions
deficits among FTSE 100 companies.

By Michael Millar