Big firms see pension schemes fall further

Thu 7 Aug 2008 at 4:14 PM

Some of the country's top employers have seen their pension schemes fall further into dept.

Actuarial firm Lane Clark & Peacock has said their combined value has plummeted from a £12 billion surplus, to a £41 billion deficit.

"No sooner have companies breathed a sigh of relief about returning to surplus but they are back to multibillion-pound deficits," noted partner Bob Scott.

The firm said the credit crunch, increased inflation and market volatility had pushed values further into the red.

"With a possible recession looming and the threat of further regulatory intervention, the outlook for continuing defined benefit provision seems rather bleak."
Their poor performance could tempt more employers to do away with final salary schemes highly prized by workers.

The Department for Work and Pensions recently proposed changes that could allow companies to water-down their schemes if they were under-funded.

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