Aggregate pension deficits for the U.K.s largest 350 listed companies totaled £47 billion ($92 billion) as of June 30, according to a quarterly survey published by Mercer, with the turmoil in global markets erasing about £61 billion in the value of the corporate defined benefit plans in just three months.
FTSE 350 funds had reported an aggregate £14 billion surplus at the end of March 2008 and a £9 billion deficit as of June 30, 2007, according to data from Mercer.
Falling equity markets and higher inflation contributed to the increase in pension deficits, according to a news release about the survey.
For good reasons, many pension schemes still have significant investments in equities, but their volatility creates considerable uncertainty for their sponsoring companies, Deborah Cooper, head of Mercers retirement resource group, said in the release. Employers should consult with trustees about the investment products available to mitigate the downside risks that equities and inflation impose on their scheme, and therefore, on their balance sheet.