U.K. Companies Least Able to Pay Pensions Since 2009 RecessionBy
Some of Britain’s top companies are the least able to meet their pension obligations since the 2009 recession, according to PricewaterhouseCoopers LLP.
The biggest pressure on FTSE 350 companies’ pension deficits is rising liabilities caused by a drop in gilt yields, PwC said in a report Monday. Despite gains in the stock market, the relative support that companies provide to their defined-benefit schemes has weakened sharply, the accountancy firm said.
The report comes after the U.K. Pensions Regulator warned companies are paying money to shareholders at the expense of shoring up deficits in their retirement schemes. The political shocks of Brexit and this month’s inconclusive election result could hurt the economy and make it even harder for companies to meet their obligations, PwC said.
“Time is running out” for many pension funds, Jonathon Land, head of PwC’s pensions credit advisory practise, said in the report. “If a combination of political uncertainty following the election and Brexit leads to another economic jolt to company performance, this would be a double-whammy for pension-scheme support.”
The Pensions Regulator estimated that 5 percent of defined-benefit pensions could fail to meet their obligations, according to PwC.