BusinessCompany NewsFTSE-100 pensions show £5bn surplus

FTSE-100 pensions show £5bn surplus

Pension schemes run by FTSE-100 companies collectively show a surplus of over £5bn under FRS 17, the new controversial pensions accounting rule, latest research reveals.

Under the new FRS 17 ruling, which many companies claim has caused a deficit in their accounts and forced directors to end final salary schemes, analysis of around three-quarters of the FTSE-100 disclosed a surplus.

Alex Waite, partner at Lane, Clark & Peacock, said: ‘Our running total of the FRS 17 pension fund disclosures published to date shows that pension schemes of FTSE 100 companies have an FRS 17 surplus of over £5bn in aggregate so far.’

The research conducted by actuaries LC&P comes in sharp contrast to many finance directors’ doom and gloom predictions for their pension schemes under FRS 17.

It will also be welcome news to the Accounting Standards Board, which has been attacked by industry leaders amid demands to modify the rule.

Waite did however highlight the lack of a standardised way in which to calculate the assumptions used by different companies.

‘As there is considerable variety between the assumptions being used by different companies, meaningful comparisons are still difficult. However, to an actuary, there is certainly more useful information in an FRS 17 disclosure than from the old SSAP 24 notes to the accounts.’

Full analysis by LC&P will be published in its ninth annual pensions costs survey this summer.

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