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Company pensions swing into surplus for first time since financial crisis

Pensioners-Older-Women-Pension-Woman-Elderly-700.jpgFtse100 pension plans have made it back into the black for the first time in more than 10 years, a new analysis shows.

Schemes back by the UK’s largest 100 listed business posted a combined £4bn in accounting surpluses as at the end of last year, according to an accounts trawl by consultants Lane Clark and Peacock cited by the Financial Times.

Strong investment growth and £13bn worth of injections from the companies into their pension plans helped reverse the £31bn deficit reported on balance sheets the previous year, the study argues.

However, Lane Clark and Peacock partner Phil Cuddeford urges companies to guard against complacency.

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He tells the Financial Times: “Although that’s good news, it is essential that corporate sponsors don’t think they’re out of the woods just yet. History has proven that such accounting surpluses can quickly be wiped out by deteriorating market and economic conditions.”

The report adds that measures used by trustees often paint a less positive picture of funding positions than the accounting basis on company balance sheets.

Three quarters of Ftse100 companies had reduced bills by introducing up-to-do life expectancy calculations, cutting average mortality assumptions, but dividends to shareholders still outpaced pension contributions by roughly 7 times.



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The amount of money transferred out of defined benefit pensions in 2017 more than doubled to £20.8bn. According to a Freedom of Information Act request filed to the FCA by the Financial Times, in 2016 £7.9bn was transferred out of DB schemes. According to the FOI, around £5.5bn was transferred out in the fourth quarter […]

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