Pension schemes for FTSE 100-listed companies failed to benefit from a rising stock market in the past year, leaving them with a gap between assets and liabilities of some £43 billion pounds ($66.09 billion), according to a new report released on Tuesday.
The pension funds have upped their equity exposure over the last year but this has not helped fill the funding hole, which is £1 billion larger than it was a year ago, research from financial consultancy firm Lane Clark & Peacock (LCP) showed. The funds plunged into deficit in 2008, going from a £12 billion surplus in 2007 to a £41 billion deficit a year later.
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LCP partner and report author Bob Scott blamed constant regulatory and legislative challenges along with falling bond yields for the shortfall. However, equity exposure in FTSE pension funds still only makes up 36.4 percent of asset holdings.
"There is a £43 billion hole, but the FTSE 100 companies in aggregate have nearly £500 billion in their pension funds. The pension funds are not about to run out of money and investment performance has been good," Scott told CNBC.