UK - London Borough of Lambeth treasury manager Harry Musisi has described the removal of Advanced Corporation Tax (ACT) as only one of the causes for pension deficits.
His comments came after Aon Consulting said pension deficits fell to £14bn during April, but would have been in surplus by £6bn with ACT.
The firm said the removal of pension schemes’ ability to reclaim ACT on dividends since 1997 had cost the 200 largest pension schemes £20bn.
Musisi, said: “The removal of the ACT relief is one of the causes of deficits, but pension funds are now recovering and have had to adapt.”
According to Aon, the total FRS17 deficit for the 200 largest pension schemes has fallen to just £14bn, its lowest monthly level since records began and 30% of those pension schemes were now in surplus.
Aon Consulting senior consultant and actuary Marcus Hurd said: "One third of pension schemes are now in surplus, which is to be welcomed, but volatility still remains and the pensions crisis is not yet over. Pension schemes will continue to rue the day that ACT relief was removed.”
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