FTSE 100 pension debt doubles

The total deficit of FTSE 100 defined benefit (DB) pension schemes has more than doubled in a year, according to research by consultancy JLT Pension Capital Strategies.

The research found that the estimated figure for the total debt is £73 billion at 31 March 2012, up £38 billion from 12 months ago.

It found that eight of the FTSE 100 firms have pension liabilities greater than their equity market value. These include: BAE Systems, BT and International Airlines Group.

The research also found:

  • Firms have paid a total of £11.6 billion in deficit contributions in the last year, up £10.8 billion from the previous year.
  • 55% of the average pension scheme asset is made up of bonds, up 50% from a year ago.

Charles Cowling, managing director at JLT Pension Capital Strategies, said: “Pension scheme deficits are becoming increasingly significant in the boardroom and in company management decision-making.

“Companies are reacting to difficult economic conditions, rising pension costs and increasingly aggressive regulation by closing more DB schemes.”

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