Are Pension Fund Deficits Now Posing Less Risk to Firms?
UK Weekly Brief › August 11, 2009
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Summary
The fall in world equity markets between 2000 and 2003, prompted many UK companies ' defined benefit pension schemes to go into deficit (relative to accrued benefit obligations). Third, the decline in corporate bond yields which are used to discount future liabilities has raised their net present value.
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Are Pension Fund Deficits Now Posing Less Risk to Firms?
The fall in world equity markets between 2000 and 2003, prompted many UK companies ' defined benefit pension schemes to go into deficit (relative to accrued benefit obligations). The actuaries Watson Wyatt estimate the combined pension deficit of FTSE 100 companies peaked at £90 billion in the spring of 2003. At end July 2006, Watson Wyatt estimate the deficit stood at £53 billion. This article looks at corporates' expendit...
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