FTSE 350 companies contributed a record £6 billion ($12 billion) to reduce deficits in their pension funds in 2006, an increase of 8% over the previous year, according to survey released by Mercer Human Resource Consulting. Contributions and investment gains helped improve overall funding positions of FTSE 350 companies, which are inching closer to surplus if measured according to the International Account Standard Boards IAS 19 framework.
For the schemes that are IAS 19 surplus, and theyre still in the minority, there is likely greater attention to move to lower-risk investments, Tim Keogh, worldwide partner at Mercer, said in a telephone interview. You could imagine lower equity weightings, more use of hedging instruments such as swaps.
Longevity has not been entirely reflected in the pension liability estimates. Mr. Keogh said. I would expect that this time next year, well probably issue another statement saying that (listed) companies have added another year to life expectancy.