The funding shortfall faced by the UK's defined benefit pension schemes broke back through the £200 billion barrier during June, figures have shown. The deficit of the 7,400 defined benefit schemes, including final salary pensions, widened to £200.1 billion during the month, after dipping below the £200 billion mark for one month in May.The current shortfall represents a dramatic turnaround from the collective £13 billion surplus the schemes had in June last year, according to pensions safety net the Pension Protection Fund.Pension schemes have faced a double whammy of falling asset values and rising liabilities during the past year. The cost of their liabilities to members has soared by 21% during the past 12 months due to lower gilt yields. At the same time, falling equity markets have slashed the value of the schemes' assets by 5.5%.A total of 6,461 pension schemes now face a funding shortfall, representing 88% of all defined benefit schemes.
The current shortfall represents a dramatic turnaround from the collective £13 billion surplus the schemes had in June last year, according to pensions safety net the Pension Protection Fund.
Pension schemes have faced a double whammy of falling asset values and rising liabilities during the past year. The cost of their liabilities to members has soared by 21% during the past 12 months due to lower gilt yields. At the same time, falling equity markets have slashed the value of the schemes' assets by 5.5%.
A total of 6,461 pension schemes now face a funding shortfall, representing 88% of all defined benefit schemes.
Hat tip naked capitalism "Dieu se rit des hommes qui se plaignent des conséquences alors qu'ils en chérissent les causes" Jacques-Bénigne Bossuet
