Vanishing act: Bond yield effects on pension deficits

Top-ups a thing of the past

Something powerful is happening across corporate UK and it is almost entirely hidden from view.

It is well known that many companies have defined benefit pension schemes - some huge, even though most are now closed to new members. As has been well-documented over many years, lots have been underfunded, with large deficits requiring seemingly endless top-up payments from the sponsoring companies. However, today those deficits have largely vanished. UK pension deficits The Pension Protection Fund tracks more than 5,000 defined benefit pension schemes, producing a monthly index giving their estimated funding position. Historically, most pension schemes have been in deficit, with ...