Britain’s pension schemes remain gripped by a funding crisis, despite the nation’s recent economic revival, figures published today reveal.
A PricewaterhouseCoopers analysis of defined benefit pension schemes – which offer guaranteed pensions based on their members’ final salaries – shows that their financial health is still far below the levels seen before the financial crisis.
The firm’s pension support index now stands at 76 out of a possible 100, with 90 indicating that schemes’ financing issues are under control.
Prior to the financial crisis it stood at 88. However, while the index has improved since a low of 64 in March, it has effectively flatlined since December 2011, when it stood at 74.
This suggests that the benefits of economic recovery and a stock market revival are not being felt by pension schemes.
The index tracks the relationship between the financial strength of Britain’s 350 biggest public companies and their defined benefit pension obligations, indicating the overall level of employer support offered to these pension schemes. Its findings could worry the Pensions Regulator, which oversees schemes.
Jonathan Land, pensions credit advisory partner at PwC, said: “Ignoring the strengths and weaknesses of their company sponsor is leaving some pension schemes vulnerable to risks that impact on both the pension scheme and employer at the same time.”Reuse content