Companies are closing pension schemes to future and even current employees as a result of economic conditions, rising pension costs and increasingly aggressive pension regulations.
JLT Employee Benefits says already more than a third of FTSE 350 pension schemes have no defined benefit pension scheme offering at all.
Charles Cowling, managing director at JLT, says he anticipates that the trend for pension liabilities to be transferred to insurance companies via buyouts will accelerate.
Over the past three years, the total disclosed pension liabilities of the FTSE 350 companies increased by £109 billion (€130 billion) to £542 billion.
A total of 14 companies disclosed pension liabilities of more than £10 billion, while 18 companies disclosed pension liabilities greater than the total equity value of the company. A further seven companies now have disclosed pension liabilities valued at over double the company equity value.
The total combined deficit of the FTSE 350 pension schemes, improved by £11 billion to £56 million over the last year.
This compares to a surplus of £13 billion four years ago despite a total contribution of £40 billion in 2012 – a result of difficult market conditions and increased liabilities.
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