Pension funds begin to climb out of the red

THE TOTAL pension fund black hole at FTSE 100 firms has fallen by nearly a third, according to new research.

Firms in the index are carrying a deficit of £47bn, down £19bn or 29 per cent, on defined benefit pension schemes, a report from JLT Pension Capital Strategies said.

During the year to 30 September FTSE 100 companies continued to cut their exposure to equities and led a flight into bonds, it added.

Charles Cowling, managing director of JLT Pension Capital Strategies, said: “With equity markets showing unnerving volatility, bonds are increasingly being relied upon to mitigate the risk posed to pension schemes. Trustees are also looking to alternative asset classes as a way of being risk averse; emerging market debt and hedge funds are proving popular, as is infrastructure.”

Only 17 firms disclosed a pension surplus compared to 66 with deficits in their most recent annual reports.