UK quoted companies using British accounting standards are required to provide information in the company accounts on how they value their pension schemes.
Although a new survey reveals an important improvement on last year’s results, findings show that many FTSE 100 stocks still do not provide adequate disclosure of pension cost assumptions.
Disclosure of information by 12 companies fell well short of the level required, according to the annual measurement survey ‘Accounting for Pensions’, produced by actuarial firm, Lane Clark & Peacock, which awarded each of the companies polled a disclosure ‘score’ of 11 points out of a maximum 20. Ten points are the minimum possible score.
Some of those companies scoring below LC&P’s accepted score – 16 points – included: Royal & Sun Alliance, WPP, Woolwich, Royal Bank of Scotland, Scottish Power, SmithKline Beecham, Unilever, Vodafone, Sema, Wolseley, Abbey National, United News & Media, CGU, and ICI.
Richard Abramson, partner responsible for the survey, said: ‘Despite improvements, this is simply not good enough.’
Thirteen companies gained top scores for their disclosure, an improved result on last year’s survey which gave only nine companies a positive score. Those companies were: BAA, Barclays, BOC, Centrica, Daily Mail, Glaxo, Hilton, Legal & General, Reckitt Benckiser, Reed Elsevier, Schroders, Standard Chartered and Thames Water.
Glaxo and Carlton received some of the lowest scores in last year’s actuarial survey.
FTSE 100 companies employ around 3.5 million people in the UK and have pension assets worth about £250bn. Of the FTSE 100, 16 companies were not analysed because 11 use defined contribution pensions, three are based overseas and two did not use UK GAAP.
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