FTSE 350 Pensions Closing Quickly:
Companies are closing pension schemes to future and even current employees as a result of economic conditions, rising pension costs and increasingly aggressive pension regulations.
Companies can no longer afford to keep their pension schemes running and can register them with the Pension Protection Fund otherwise face going in to administration.
More than a third of FTSE 350 pension schemes have no defined benefit pension scheme offering at all.
Over the past three years, the total disclosed pension liabilities of the FTSE 350 companies increased by £109 billion (€130 billion) to £542 billion.
A total of 14 companies disclosed pension liabilities of more than £10 billion, while 18 companies disclosed pension liabilities greater than the total equity value of the company. A further seven companies now have disclosed pension liabilities valued at over double the company equity value.
The total combined deficit of the FTSE 350 pension schemes, improved by £11 billion to £56 million over the last year. This compares to a surplus of £13 billion four years ago despite a total contribution of £40 billion in 2012 – a result of difficult market conditions and increased liabilities.
Instead they are choosing the forced workbased pension scheme where the employee contributes with contributions from the employer without future liabilities for the employer in the event of poor results.