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Ftse 100 Pensions Are 'in Red'

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Pension funds of firms listed in the FTSE 100 stock index are back in the red after their biggest annual swing in funding levels since 2002.

Actuarial group Lane Clark & Peacock (LCP) found that the pension funds had a net deficit of £41bn in mid-July.

This compared with a £12bn surplus in mid-July 2007, which had been the first surplus for five years

But the report said that the position could have been far worse given the problems facing financial markets.


The annual Accounting for Pensions report said that the credit crunch, equity market volatility and rises in expected inflation had all played their part in severe swings in funding levels. The position could have been worse, but for companies pumping nearly £40bn into their pension schemes over the last three years and taking some steps to reduce risk.

Bob Scott, partner at LCP, said that the brief period of surplus until early 2008 had allowed some companies to take the opportunity to cut down on these risks.

But he was keen to give a warning about the future for these funds.

"No sooner have companies breathed a sigh of relief about returning to surplus but they are back to multi-billion pound deficits," he said.

"With a possible recession looming and the threat of further regulatory intervention, the outlook for continuing defined benefit provision seems rather bleak."


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Biggest story in ages. Shows that lots of the losses from the RMBS have ended up with pension schemes. Not surprising given that they were packaged up in the way they were to pass out to pension funds...

Not only have people mortgaged up to the eyeballs to buy over inflated houses, they've also funded it themselves through their pension funds...

This looks exceptionally bad, the change is enormous, and we haven't yet see the fall in UK house prices leading to falls in UK RMBS values.

The pension funds also hold property (particularly commercial), that will likely fall further.

I can't see a happy ending.

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Pension funds = Central depository of sh*t! Of course this is where it will end up. This is what they are there for. Remember the 'pension holiday' all the big companies took before 2000 when all the dot.coms etc were spicing up the funds. Expect nothing less, this is the UK's 'Value' engine at work looking after the big boyz.

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  • 396 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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