UK company pension schemes are four times more likely to be in deficit than US schemes, research has suggested.
Just 5% of UK pension schemes are fully funded, which means that they have enough assets to meet their future obligations to members.
In the US, 20% of pension schemes are fully funded, according to the research from Aon Consulting.
UK pension schemes are worse off than US schemes because employers’ contribution rates are lower, Aon said.
Overall, the average pension deficit of a UK firm equates to seven months of pre-tax profits, whereas in the US the figure is two months.
Both US and UK pension schemes are finding it difficult to cope with the costs of workers living longer, Aon said.
Last week, actuary firm Lane, Clark and Peacock calculated that the combined pension deficit of the FTSE 100 companies had narrowed in the past year.
Comments are closed.