The value of pension top-up payments made by employers has nearly halved in two years, research has found.
Figures released by the Office for National Statistics (ONS) revealed the value of these payments fell from a peak of £13.2bn in 2006 to £6.8bn in 2008.
The ONS said the payments were made mainly to remove deficits in the pension schemes.
Their drop reflected a fall in overall company contributions during that time, the BBC has reported.
The ONS said: “In 2008, the total income of self-administered pension funds was £58.6bn, down sharply from £71.8bn in 2006.
“This is the biggest fall since the start of the series in 1984. It was driven by a reduction in employers’ special contributions and a drop in transfers between pension funds.”
The ONS figures, in the latest update to the publication Pension Trends, refer to funded pension schemes run by trustees or fund managers – known as self-administered pension funds.
These hold about 70% of all company pension fund assets, with the rest being held by schemes run on the behalf of employers by insurance companies.
The ONS said the onset of the recession two years ago, and the accompanying drop in stock markets, dented the value of assets held by the self-administered schemes.
This means companies may be forced to increase their special contributions again, to eradicate the renewed build up of deficits.
John Ball, of Towers Watson, told the BBC: “This data shows the calm before the storm.
“The contributions employers are paying today largely reflect agreements they hammered out with trustees before the worst of the financial crisis.
“New valuations paint a much more gloomy picture and will lead to companies either paying more now, taking longer to pay off their deficits, or both.”
Comments are closed.