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 news |
|---|
| Warning on pension annuities - Thu, 22 Jul 2010 |
| Government reforms pension annuities - Tue, 20 Jul 2010 |
| Pension holders set to benefit from energy rebate scheme - Tue, 13 Jul 2010 |
| More News |
Pensions Newsletter
Monthly pensions news, provider info & more.
Transferring a Pension
Learn more about pension transfers and enquire about transferring your pension.
SIPPs
Read up on Self Invested Personal Pensions and take control of your pension fund.