New alert on pensions black hole
COMPANY retirement funds are still threatened by yawning black holes despite gains in the stock market, a leading expert warns today.
Billions of pounds of extra contributions by firms have also failed to plug the gap, says the report by pensions consultant John Ralfe for RBC Capital Markets.
Only a handful of Britain's richest corporate elite show signs of making good their shortfalls. BP, HSBC, Marks & Spencer, Barclays and GlaxoSmithKline made a total of £4.5bn extra contributions. Two-thirds of Footsie firms saw their deficits widen.
The overall funding gap faced by FTSE 100 companies shrank by £6bn to £60bn in 2003, due mainly to stock markets gains.
Big companies more than doubled their pension payments to £11.6bn, but the bulk of that money was swallowed up in interest charges and the mounting costs of providing benefits, with only £1bn left to reduce the red ink. 'Companies must run hard just to stand still,' Ralfe said.
Shadow Pensions Minister Nigel Waterson MP has asked Parliamentary Ombudsman Ann Abraham to probe possible government maladministration on behalf of 65,000 people whose schemes were wound up.
David Willetts, shadow work and pensions spokesman, said: 'We just can't keep on adding extra burdens to company pension schemes.'
RESEARCH commissioned by the Department for Work and Pensions into reforms proposed in 2001 by fund manager Paul Myners found that large companies have made most progress.
