Money News
12th August 2008
Final salary pension schemes back in the red
The UK's final salary pension schemes have slipped into the red, it has been revealed.
According to new data from the Pension Protection Fund (PPF), the funds were facing a deficit of £24.1 billion in July.
In June, they had a surplus of £8.3 billion, while during July last year the surplus was £83.3 billion.
The downturn in fortunes for the schemes has been caused by the volatility in equities markets and the soaring cost of providing future pensions.
A statement from the firm read: "Over the past year, the negative impact of equities on scheme assets, combined with falling bond yields, have led to an overall worsening of the funding position.
"With lower bond yields resulting in an 8.6 per cent increase in aggregate liabilities…weaker equities have reduced assets by 7.4 per cent."
PPF's research covered 7,800 defined benefit schemes, with 76 per cent found to be in deficit.
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