Most final salary pension schemes in Britain face shortfalls, the Association of Consulting Actuaries (ACA) has warned.
A recent survey by the association found that 89 per cent of final salary pension schemes lack sufficient funds to cover their liabilities.
Companies can only cover 85 per cent of their liabilities on final pension schemes. Actuaries estimate the total deficit in Britain would be more than £130 billion.
The survey report shows the immense efforts being made by many firms to meet the cost of pensions, according to Adrian Waddingham, ACA's chairman.
He said these costs have in many cases increased far beyond what was expected when the pension schemes were initially set up.
"In part this is down to increased longevity and weak investment returns, but added regulatory and government-led enforced benefit improvements have not helped at all," he added.
The report stated that many companies were closing final salary pension schemes because of increased shortfalls.
Over the past five years, more than half of companies questioned by the ACA had stopped offering final salary pension schemes to new employees.
Less than a third of companies still offer final salary pension schemes to new employees.
Mr Waddingham called on the government to boost state pension provisions in order to cover the shortfall, which is expected to take up to a decade to overturn.
British pension schemes face serious deficits
Pensions Quote Line
0845 108 0505
British pension schemes face serious deficits
Fri, 03 Jun 2005
Pensions.co.uk is part of a large network of financial sites created to help advise you on life events, such as buying a house, Mortgages.co.uk; insuring your car - CarInsurances.co.uk; your life - LifeInsurance.co.uk; and your home - HomeInsurance.co.uk.
1998 - 2009 UK Pensions - Planning before, at the onset and during retirement.
| pensions news |
|---|
| NAO issues warning on public sector pensions - Fri, 12 Mar 2010 |
| State pension age should be raised to 70 - Mon, 01 Mar 2010 |
| NAPF urges government to reform pension plans - Fri, 26 Feb 2010 |
| More News |
Pensions Newsletter
Please enter your email below and subscribe to our monthly newsletter
Save on Your Mortgage
Would you like to save money on your mortgage? Fill out our quick mortgage enquiry form.
Protect Your Health
Find Critical illness, Life and Private Medical Insurance PMI policies.