No great rotation among UK pension schemes

Pensioner-with-caneThe average allocation to bonds among FTSE 100 pension schemes has risen from 33% six years ago to 56% at the end of 2012, according to

figures that challenge market expectations of a “great rotation” from bonds to equities.

The average bond allocation has continued to rise over the past year. It was 50% at the end of 2011, says the research from investment consultancy JLT Pension Capital Strategies.

“What is clear is that the so-called ‘great rotation’ out of bonds into equities is a retail investment phenomenon and that the inverse rotation is very much at work across UK pension schemes,” says Charles Cowling, managing director of JLT Pension Capital Strategies.

The research found the average deficit of FTSE 100 schemes to be £50 billion (€57 billion), an improvement of £8 billion that came at a cost of £12.7 billion of deficit funding injections.

Total disclosed pension fund liabilities rose £31 billion to £475 billion during 2012, found the research.

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