Offshore Capitalist

Britain’s biggest pension schemes battle £44 billion deficit

Is your company pension scheme your only retirement plan?  Are you confident that your employer will still be around when you retire, to pay your pension?  Are you confident the company actually has the resources to cover it’s pension committment?  REALLY?  Think Lehmans, think Enron, think…

A vast underestimation of obligations has left some of Britain’s largest pension funds, including Lloyds Banking Group and Royal Bank of Scotland, battling a combined deficit of £44 billion.

Research by AlphaValue shows that in 2008 pension deficits of 430 major listed European companies with a market cap of £4.7 billion, grew to £268 billion – a 22% increase on 2007.

UK plans accounted for £751 billion, or one third, of total pension assets and racked up a deficit of £44 billion.

A total of 31 firms had underestimated their obligations by 40% or more and British schemes were the worst offenders.

Lloyds falls £12.5 billion short.  RBS has a pension shortfall of £11.7 billion and British Airways needs to make up £9.3 billion.  AlphaValue believes that companies across Europe have underfunded their pension schemes by over €300 billion (£265 billion).

via Britain’s biggest pension schemes battle £44 billion deficit | Professional Investor | Citywire.

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