UK - Pension fund finances have crumbled with FRS17 deficits soaring to £150bn as the FTSE100 plunged to almost half its peak level this week.The deficit has increased from £130bn at the end of last year.
Watson Wyatt calculated even this figure would correspond to a deficit of around £65bn on a more conservative funding basis – and would take more than 10 years to plug.
Watson Wyatt partner Robert Hails said: “If there was no recovery in equity markets even this deficit of £65bn could require contributions of up to £10bn per year over the next 10 years or so to fill the funding gap.”
Last Monday the FTSE100 flirted with the 3475 level – half its peak of 6950 at the end of 1999. The FTSE100 closed on Monday at 3480 – a level not seen since 1995.
The drop in stock markets is being blamed on uncertainty about possible war in Iraq and the financial strength of insurers – some of which need to sell some of their equities to shore up their regulatory asset position.
Insurance analyst Ned Cazalet said life offices were feeling the pain of the stock market falls and warned that some might have to take drastic action to survive.
An unnamed London-based employer has been hit with a £350,000 fine from The Pensions Regulator (TPR) for failing to fully comply with its pension duties.
XPS Pensions has enhanced its fiduciary management selection service in order to help trustees through initial selection and mandatory re-tendering.
One in five defined benefit (DB) schemes are in The Pension Regulator's (TPR) weakest two categories, analysis by Hymans Robertson has revealed.
State Street Global Advisors (SSGA) has been selected as the first index manager for the Asset Management Exchange's (AMX) passive funds.