Pension Capital Strategies Ltd (PCS) today released their quarterly report investigating the pension disclosures of the FTSE100 companies.
The report’s findings reveal that the total deficit of FTSE100 pension schemes as of 30 September 2007 is an estimated 2 billion, an improvement of 44 billion from one year ago.
“There is increasing evidence of FTSE 100 pension schemes reducing the mismatching of pension assets to liabilities by reducing equity holdings and increasing bond allocations. Ten FTSE 100 companies reveal that they have increased bond allocation by more than 10% over the period since their previous accounts.
“Whilst deficits seem to be improving on paper, PCS believes that FTSE 100 companies are continuing to underestimate future life expectancy by about one to three years, meaning that the total pension deficit could be understated by as much as 40 million. Companies need to take a more detailed look at the life expectancy figures that they are applying to their pension scheme to avoid future problems,” says Charles Cowling, managing director, PCS, commenting on the findings of the report.
Eighteen companies in the FTSE100 group disclosed a pension surplus in their most recent annual report and accounts, while seventy-five companies showed a pension deficit. However, PCS estimates that around forty companies would disclose a surplus if they had a year end of 30 September 2007.