Equity markets shrink pension deficits

Increased contributions, rising equity markets and bond yields have helped
shrink FTSE100 pension deficits by almost £12bn last month, new research shows.

The reduction marks the largest single month fall in deficits since October
2003, according to actuaries Watson Wyatt. But it still leaves the aggregate
pension shortfall for FTSE100 companies at £55bn at the end of July 2005.

Stephen Yeo, a senior consultant at Watson Wyatt, said: ‘Although companies
are contributing to their pension schemes at record levels, it is movement in
the value of assets and liabilities that dominate the changes in the FRS17
measure of pension deficits.’

Official figures from the Office for National Statistics show that pension
contributions reached a record £22.5bn in 2004.

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