UK Pension Shortfalls Improve

April 3, 2006 ( - The collective pension shortfall in FTSE 100 UK pension plans was down to £60 billion in March, according to data from Deloitte & Touche.

Reuters reports that Deloitte said higher stock values and lower bond prices combined to narrow the shortfall.   The UK pension deficit peaked at £110 billion in January (See Market Still Wreaking Havoc on UK Pension Schemes).

Even small changes to bond yields can dramatically alter the deficit because yields are used to calculate pension schemes’ liabilities under Britain’s FRS 17 accounting standard, Reuters said.

Aon Consulting also reported that pension deficits of 200 of the country’s largest firms – including all those listed on the FTSE 100 index – fell to £51 billion at the end of March from £73 billion at the end of February.

Pension deficits have caused many UK companies to shut down defined benefit schemes to new employees (See Survey Documents Changes in UK Pension Offerings).