The pension scheme deficits of the UK’s top 350 public companies have increased, according to the HR consulting firm Mercer. The deficit grew by a record 24% last year, from £75bn in 2004 to £93bn in 2005, its research revealed. This was despite a rise in the value of the UK stock market, which boosted the assets of many schemes. “Favourable investment performance did little to dilute the value of pension scheme deficits in 2005,” said Tim Keogh, worldwide partner at Mercer. Increased life expectancy was also a contributing factor, Mercer said. Receive the Personnel Today Direct e-newsletter every Wednesday Nearly half of the 350 FTSE companies have now closed their final salary pension schemes in the past few years. Most have replaced them with defined contribution schemes. “Just as people have to pay more to trade up their house after a property boom, despite the value of their current home increasing, employers have to contribute larger cash sums to reduce their pension scheme deficits when all markets rise,” Keogh said.
Sign up to our weekly round-up of HR news and guidance
previous post