View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
December 7, 2010updated 13 Apr 2017 8:51am

Volatile ride for UK pensions deficit

Things looked better for hard-pressed sponsors of UK defined benefit (DB) pension schemes at the end of October, consultancy Aon Hewitt has reported, with the combined deficit of the countrys 200 largest listed companies at £69bn ($110bn), its lowest level in 13 months

By LII editorial

Things looked better for hard-pressed sponsors of UK defined benefit (DB) pension schemes at the end of October, consultancy Aon Hewitt has reported, with the combined deficit of the country’s 200 largest listed companies at £69bn ($110bn), its lowest level in 13 months. The deficit at the end of September 2010 stood at £80bn.

Working in favour of DB scheme sponsors in October was a firmer equity market, while bond yields, the benchmark measure for valuing scheme liabilities, remained relatively stable.

Indicative of the sensitivity of the deficit to variations in the major variables determining it, Aon Hewitt estimated that to eliminate it completely would require either a 20% rise in the equity market.

Also required would be a rise in corporate bond yields to 6% from their current level of 5.15%, or a decrease in projected long-term inflation to 2.5% from its current 3.35%.

NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The industry's most comprehensive news and information delivered every month.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Life Insurance International