UK pension plans still haunted by deficits despite stock rally

Michael Bow
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THE BLACK hole at the heart of Britain’s corporate pension schemes increased by £25bn last year despite better returns from the stock market and higher payments by companies, fresh figures show.

The difference between the amount of cash that FTSE 350 company pension schemes have to pay pensions and the value of pensioner payouts went £97bn into the red last year, a 35 per cent increase on the £72bn deficit recorded in 2012.

The figures, published by Mercer, are surprising because stock markets rose 19 per cent last year, boosting the value of the pot of money companies have to pay out pensions.

The estimated aggregate assets held by FTSE 350 schemes is now £563bn, versus aggregate liabilities of £660bn, the figures show.

Mercer’s Ali Tayyebi said deficits were higher because of rising inflation expectations.