UK - The combined deficit of the UK's biggest schemes remains unchanged from six years ago at £68bn (108bn), despite contributions of more than £50bn, figures reveal.
When the Aon Hewitt 200 index commenced on 31 March, 2005, the deficit of the 200 largest UK final salary schemes stood at £68bn. Six years later the index revealed the deficit is still £68bn, despite more than £50bn being pumped into schemes over this period.
Aon Hewitt principal and actuary Marcus Hurd (pictured) said: "Contributions are only part of the equation, but it's devastating to see £50bn of contributions eaten up by lacklustre longer term investment returns, driven by challenging and volatile financial market conditions. After six years of deficit contributions, companies are left exactly where they started."
The consultant said only a handful of companies were able to take advantage of opportunities during this period to put their schemes in a stronger position than they were six years ago.
However, it added many companies missed these opportunities because the governance structure of UK pension schemes often does not lend itself to taking advantage of short-term market developments.
Principal investment consultant John Belgrove added: "In the future, trustees and companies will need to act more nimbly to take risk off the table as and when market opportunities and company affordability dictate, otherwise the rollercoaster ride will just continue."
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