Rise in Government borrowing may wipe pension shortfalls

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An increase in Government borrowing could serve to wipe out UK companies' pension scheme deficits, a...

An increase in Government borrowing could serve to wipe out UK companies' pension scheme deficits, analysis by Aon Consulting has claimed. FTSE 100 companies currently have deficits amounting to £62bn on their schemes but Aon estimates that if the yield on long-term gilts was to rise 1% to 5%, this could be wiped out. Donald Duval, chief actuary at Aon Consulting, said: "Contrary to popular opinion, the biggest driver of pension scheme deficits is not equity markets, but interest rates,which control how much money the pension schemes need to hold to meet their liabilities. "This explain...

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