FTSE 100 firms' deficits improve

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The total deficit of the FTSE 100's pension schemes was £17bn lower at the end of June than a year earlier, according to new research.

Pension Capital Strategies, part of the JLT Group, yesterday revealed the total deficit had improved to £73bn in a quarterly report compiled with JP Morgan.

The improvement came with the recovery in the equity markets as well as a significant increase in the funding of the deficits. Last year saw total funding of £11.8bn, with Royal Dutch Shell contributing the largest sum, of £2.7bn. A further 57 other blue chip companies also reported significant deficit funding contributions.

Yet, the report found that 10 companies have disclosed pension liabilities that are greater than their equity market value.

The liabilities at British Airways, BT and Invensys are more than double the market value of the businesses. Only five companies disclosed a pension surplus.

The total pension liabilities in the past 12 months rose from £378bn to £434bn, with 14 companies disclosing liabilities of more than £10bn, the largest of which is BT, with £43bn.