Company pensions in dire straits

A NUMBER of leading company pension funds remain in dire straits despite last year's improvement in the stock market, according to research by investment bank UBS.

The FTSE 100 companies with the largest pre-tax pension deficits in relation to market value are Rolls-Royce (£1.5bn), BAE Systems (£2.3bn), GKN (£784m), BT (£5.5bn), ICI (£707m), Royal & SunAlliance (£493m), National Grid (£2.1bn) and Scottish & Newcastle (£546m).

The shortfalls are calculated according to new accounting rules that insist firms give a snapshot of their fund's value, instead of smoothing out peaks and troughs.

FTSE 100 company pension funds had an aggregate deficit of £37.4bn at the end of last year - less than half the £75.9bn when shares hit bottom in March.