News Article - 03 August 2006
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The UK's largest companies are still facing a deficit problem in their pension schemes despite record levels of contributions from employers into the funds pot.

A new report into the state of the pension problem faced by the UK's FTSE 100 firms found that the situation had "barely changed".

Contributions increased by 12% according to the survey of final salary schemes by actuary firm Lane, Clark and Peacock (LCP).

Despite a record £12.1 billion being placed into pension funds by companies on the index over the past year, their combined pension fund deficit fell by just £1 billion in the year to July.

FTSE 100 firms are still faced with a £36 billon deficit, down from £37 billion a year earlier.

LCP's report suggested that equity and bond market volatility had led to the decrease being so small. The deficit has actually climbed since April, when it hit a low of £29 billion.

There was good news for five companies, however. The final salary pension schemes of Associated British Foods, the Gallaher Group, Johnson Matthey, Old Mutual and Schroeders were all found to be in surplus.

At the other end of the scale, British Airways, BAE Systems and ICI had a pension deficit equivalent to at least 30% of their market value.

The LCP said that companies were on track to clear the deficit by 2012.

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