E&Y pension deficit grows to £230m
Fall in corporate bond rates sees pension deficit at Big Four firm grow
Ernst & Young’s pension deficit has grown by £60m to £230m, the firm’s
annual report has revealed.
The deficit stood at £170m last year, growing by £60m as a result of altered
assumptions underlying the pension scheme liabilities, which themselves added
£100m to the deficit.
E&Y is not the only Big Four firm nursing a pension deficit:
PricewaterhouseCoopers recorded a pension deficit of £298m earlier this year.
E&Y said it will make contributions of £10m a year until 2013 to help
make up the shortfall, subject to re-appraisal when the next actuarial review is
undertaken, in 2007.
‘The increase in deficits reflects the impact of the fall in corporate bond
rates which are used to value the liabilities,’ a spokeswoman said.
‘While other firms have closed their “defined benefits schemes” to new
entrants, only E&Y has closed its scheme to future service accrual,
eliminating the risk associated with future salary increases. E&Y has
committed to a schedule of special contributions with the Trustees of the
pension scheme to fund the deficit.’