UK firms cut pension deficits by one-third in 2006

The UK’s top firms reduced their pension scheme deficits by more than one-third in 2006, research has revealed.

Mercer HR Consulting found that shortfalls in funds across the FTSE 350 fell by 29% last year to £61bn.

The reduction in pension deficits will be welcome news to employers, who collectively bear the cost of claims on the Pension Protection Fund, as well as employees.

However, the large increase in deficits in 2005 means aggregate deficits are only one-fifth below the levels they were at on 1 January 2003.

Sign up to our weekly round-up of HR news and guidance

Receive the Personnel Today Direct e-newsletter every Wednesday

Email(Required)

OptOut

From time to time, we will send you emails about selected products, events and services from Personnel Today and OHW+ - but you can choose to opt-out at any time. If you do not wish to receive these emails, please tick this box.

Name

This field is for validation purposes and should be left unchanged.

Δ

Tim Keogh, worldwide partner at Mercer, said: “Rising funding levels are good news for pension scheme members, but the underlying longevity and investment risks remain significant issues for sponsoring employers.

“There has been little change in relative risk levels over the past four years.”