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UK pension deficits suffer largest ever rise in one day

Commenting on the latest figures, Marcus Hurd, senior consultant and actuary at Aon Consulting, said:

As a result of the sharp market fall, UK pension deficits rose by £15bn yesterday, the highest single-day rise since FRS17 was introduced in June 2001. This morning it fell a further £9bn and the deficit for the top 200 UK schemes now stands at £42bn. Based on market movements over the past week, pension schemes have lost over £40bn in a week, which is equivalent to wiping out all the gains made in 2007.
 
"The significant increase in deficits has arisen primarily from world stock market crashes, however the worst could not be over and we could see further damage to the value of pension schemes when the US market opens today. The fact that corporate bond yields have also remained relatively stable has also added to the impact. Usually the yields offset the impact of equity market falls by increasing during an equity market fall. This has not as yet happened."
 
"Whilst alarming, the falls will only be of immediate concern to those who are looking to either settle their liabilities in the short term or who have to report the value of the scheme deficit publicly. Many companies have recently reported their deficits at 31 December and so will have narrowly escaped the agony of watching their quoted balance sheet deteriorate over a matter of days. This will be of great concern, however, to the many companies which are due to prepare annual accounts at 31 March."
 
For more information contact:
Leo Wood / Susie Patterson                                                                              
FD                                                                                           
Tel: 020 7269 7137 / 7233
 
About Aon Consulting
Aon Consulting is a leading global human capital consultancy, helping organisations of every size to attract and keep the employees they need. We advise on all aspects of employment, including health-related insurance and risk; employee benefits and pensions; human resource strategy planning; job design and change management; and staff assessment and legal issues. Aon Consulting is a division of Aon, one of the UK’s largest insurance brokers and providers of risk management services and a major force in reinsurance and the UK human capital consulting market. Aon Consulting Limited is authorised and regulated by the Financial Services Authority.
  
About Aon
Aon Corporation (www.aon.com) is a leading provider of risk management services, insurance and reinsurance brokerage, human capital and management consulting, and specialty insurance underwriting. There are 43,000 employees working in Aon’s 500 offices in more than 120 countries. Backed by broad resources, industry knowledge and technical expertise, Aon professionals help a wide range of clients develop effective risk management and workforce productivity solutions.
 
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