12 August 2005
Company pensions are in £37 billion of deficit, according to latest figures.
A study by consulting actuaries Lane, Clark and Peacock suggested that despite firms taking great strides to reduce the deficit, putting £10 billion into pensions over the past 12 months, it will take eight years to rectify.
The report, which is aimed at company shareholders, found a number of major firms to face huge pension shortfalls and was greeted with disappointed by British Airways and British Telecom, amongst others.
Speaking to BBC News24, report author Martin Slack said: “We were not surprised by the findings although a lot of financial directors were surprised when they saw their results coming out because they have clearly seen the way the stock markets have moved ahead and they have paid some contributions in towards funding these deficits.
“But what has set this back was first of all the recognition that a lot of pensioners are going to live longer than was previously expected, which means we need more money in the pension scheme.
“Also, the way that bond yields interest rates have fallen over the year, which again means we needed more money.”
Mr Slack added that a fresh freeze in interest rates would boost firms seeking to close the pensions deficit.