July’s surge in equity markets and bond yields saw a fifth wiped off the pension deficits of FTSE 100 companies.This is the biggest reduct- ion in a single month since October 2003. It resulted in 12bn being cut from blue-chip pension deficits, leaving a 55bn funding gap. However, the aggregate fall in FTSE 100 pension defi- cits for the year so far is only 1bn, as falling bond yields increased the value of liabilities on an FRS17 basis for much of the first half of the year. Watson Wyatt senior consultant Stephen Yeo says FTSE 100 companies typically have between 60 and 65 per cent of their pension funds in equities, enabling them to benefit from gains in the market, including 3 per cent in July alone. He says employer contributions to company pension schemes reached a record 22.5bn in 2004 – more than five times the amount contributed by individuals, which at 4.1bn was itself a new high. Norwich Union finance director Mike Urmston says any reduction in pension deficits is good news because he fears they have held back markets recently. Urmston says: “It is good news because the UK market has been held back by the overhang of pension deficits.” Yeo says: “One swallow does not make a summer and the fact that nearly 20 per cent was wiped off pension deficits in one month shows how much they can fluctuate. “It is the first time for a long time that both equity and bond markets have gone in the right direction.”
Skandia has posted 19 per cent growth in sales in the first six months of this year with a business total of 301m. This brings its assets under management to a new high of 23bn. The company achieved 43 per cent growth last year.
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Prudential is increasing its equity exposure in its 73bn life fund. It has boosted UK and overseas equity exposure while reducing property and fixed-interest holdings due to concerns over yields and falling interest rates. Investment director Martin Brookes, who runs the mammoth portfolio, says equities are looking increasingly attractive, with earnings’ growth outpacing price growth, […]
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Jelf Employee Benefits has launched Jelf AEase, an enhanced auto-enrolment (AE) service aimed at companies with fewer than 50 employees that are due to stage from August 2015.
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