01 September 2009
According to a report by actuaries, Aon Consulting, a steep rise
in the cost of providing final salary pensions in the private
sector has pushed the long-term bill above £1tn for the first time.
The figure affects more than 8,000 employers with final salary
pension schemes.
Rising life expectancy and declining annuity rates have worked
with falling bond yields to drive up the cost of providing pensions
and Aon said the value of pension assets was unlikely to keep pace
with rising liabilities, leading to growing shortfalls.
A rise in stock market prices of almost a quarter since the
collapse of Lehman Brothers last year had almost kept pace and fund
deficits had declined only slightly, it said, but this situation
was likely to get worse. The deficit for the top 200 schemes
reached £78bn, up from £73bn the previous month.
