Dramatic drop in FTSE 100 pension deficits

The deficit in the total final-salary pension funds of the FTSE 100 has been
cut by £35bn since the start of the year, according to actuaries from Deloitte.

The drop was a result of falling bond prices, which has now left the deficit
at £40bn – based on data issued on 7 July by FTSE 100 companies.

A fall in bond prices over the past six months outweighed the impact of a
pullback in equity markets during May, Deloitte said, resulting in the drop in
the pension black hole.

Pension funds use bond yields, which move in the opposite direction to bond
prices, to calculate future liabilities.

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