A tenth of FTSE 100 pension plans greater than market value

One in ten FTSE 100 organisations have pension plans that are greater than their market value.

According to research from Pension Capital Strategies (PCS), a division of insurance broker Jardine Lloyd Thompson, over the last 12 months, the total disclosed pension liabilities of the FTSE 100 have risen from £378 billion to £434 billion.

Fourteen organisations have disclosed pension liabilities of more than £10 billion, while 27 have disclosed liabilities of less than £100 million.

BT, British Airways and Invensys all have pension liabilities which are more than double their market value, at £43 billion, £16.8 billion and £5.4 billion respectively.

The total pension deficit of the FTSE 100 was an estimated £73 billion at the end of June, an improvement of £17 billion on last year.

Additionally, there has been a significant increase in the funding of pension deficits. Last year saw total deficit funding of £11.8 billion, up from £4 billion the previous year.

Royal Dutch Shell had the largest deficit contribution at over £2.7 billion, however 57 FTSE 100 companies also reported significant deficit funding contributions.

The research also found there has been a marked decline in the provision of ongoing defined benefit (DB) schemes. The reduction in total service cost from £7 billion in the previous year to £6 billion in the current year represents a 15% decline in employee pension provision.

While only five organisations disclosed a pension surplus in their most recent annual report and accounts, 80 organisations disclosed pension deficits.

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