18/Apr/2014 - Last News Update: 21:56

Big firms face high pension costs, says LCP

Category: Scotland

Published: 10th Jul 2012 00:01:44

Companies in the FTSE 100 share index paid an extra £11bn into their pension schemes last year, aiming to reduce the deficit of schemes.

However, actuaries LCP found that the group still had a total deficit of £41bn at the end of May 2012.

This was double the figure of a year earlier, but down on the £51bn deficit seen 12 months before that.

The LCP report, produced annually, confirmed that no FTSE 100 firm offers a final-salary scheme to new employees.

These final-salary pensions, which have been withdrawn by a number of companies over recent years, guaranteed a pension based on earnings at the end of a worker's career and length of service.

The collective deficits of the pension schemes can fluctuate by up to £10bn a day, LCP said.

However, it also warned that costs for firms were likely to increase, as a system for automatically enrolling workers into a pension scheme comes into force.

Unless companies cut back on current contributions and benefits, pension contributions for the FTSE 100 were expected to exceed £26bn by 2013, according to the report.

"The overall picture is a challenging one," said LCP partner and report author Bob Scott.

The changing nature of pension funds, including a less risky strategy from companies, is reflected in the analysis.

Only 35% of pension scheme assets were being held in equities at the end of 2011, compared to 43% in 2011 and nearly 70% 10 years ago, the report said.

Source:
BBC News External Link Show Citation

Latest News

Harvard Citation

BBC News, 2012. Big firms face high pension costs, says LCP [Online] (Updated 10th Jul 2012)
Available at: http://www.ukwirednews.com/news/1439568/Big-firms-face-high-pension-costs-says-LCP [Accessed 18th Apr 2014]

News In Other Categories

  • US government delays Keystone XL pipeline decision

    The US state department has given federal agencies more time to review the Keystone XL oil pipeline before it determines whether to issue a permit.
  • Bristol Academy extends reach overseas with first foreign students

    With the doors to its brand new £1million training centre officially open, one of the UK's leading apprentice training providers, Bristol based S&B Automotive Academy, is showcasing its world-class facilities by launching a series of foreign student exchanges for the first time in its 41-year history. To get a flavour of what life is like as an apprentice in the UK, the Academy hosted 16 apprentice engineers and bus drivers from the G9 Automotive College in Hamburg, Germany, as part of a Europe-wide vocational training initiative called the ‘Leonardo Programme’ with support from the European Social Fund. In a reciprocal arrangement, S&B will be sending nine apprentices to Germany during February 2012 so that they can get an appreciation of life in the automotive industry on the Continent. A further three German exchange groups are being planned for next year. Designed to assist the development of vocational skills and training across Europe, including work placements for trainees, the Leonardo Programme has a budget of €1.75bn, which is helping to encourage UK organisations to work with their counterparts abroad. In what is expected to be another challenging year for employers in the UK automotive sector, S&B’s Chief Executive, Jon Winter, claims that the exchange initiative will bring many benefits to the Academy and its apprentices: “In a world of global automotive brands, it’s important for our learners to understand the international context of the industry they have chosen to make their career. This new exchange programme will enable apprentices and Academy staff alike to achieve a better understanding of the challenges and opportunities within the automotive arena in Europe. With the Academy’s influence also extending to the USA and Asia, there’s every possibility that this initiative could move further afield in the future.” Continued Winter: “The need for skilled technicians across the world is on the increase and we actively encourage our apprentices to look at broader horizons during their training. Many of them have already learned the phrase ‘Vorsprung durch Gelehrtheit’, quite simply, ‘Advancement through learning.” In the 2010/11 academic year, S&B doubled the number of successful Apprenticeships over the previous year with some 350 apprentices graduating from the Academy. At the same time, achievement levels reached an all-time high with an overall success rate of 85%. For those learners on the Advanced Apprenticeship three-year programme, success rates were even higher, at over 98%. PHOTO CAPTION: As part of their exchange visit, S&B Automotive Academy arranged for the German apprentices to visit Hampshire bus operator, Bluestar, at its Barton Park depot. The students are pictured with S&B’s Andy West (3rd right) and Steve Prewett, Bluestar’s Area Engineering Manager (2nd right). Ends http://www.sandbaa.com
  • Ellie Simmonds qualifies for European Championships

    Ellie Simmonds, Stephanie Slater and Amy Marren were among those gaining IPC European Championships qualification times on the opening day of the British Para-Swimming meet in Glasgow.
  • North Wales Fire appeal over reporting arson attacks

    An appeal has been made for people to report deliberately started fires after crews spent several hours tackling a blaze at two properties in Flintshire.
  • Fivemiletown, County Tyrone: Two vehicles in serious road crash

    There has been a serious two-vehicle road crash in County Tyrone.
  • Martin Currie report second pre-tax loss

    Martin Currie, the Edinburgh-based asset manager, has reported a second pre-tax loss in a report made available by Companies House.