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CBI says UK pension deficits fall by E89.7bn

UK - The employers' body the Confederation of British Insurers says companies' pension deficits under the FRS17 accounting measure have fallen by 60 billion pounds (89.7 billion euros).

The CBI said the figures show the pension crisis is "still serious but
easing". "Rises in the stock market and increased company pension contributions have wiped some 60 billion pounds off the UK pensions fund deficit," the CBI said.

A CBI report found that the deficit was around 100 billion pounds at the end of 2003 - down from an estimated 160 billion pounds in June. The CBI said it was "hugely encouraging" but added: "The overall deficit remains enormous and is still a major business concern."

It said firms will still have to make additional contributions averaging six billion pounds a year over the next three years - half the 12 billion-pounds that was estimated a year ago.

And the CBI said that constraints on business investment caused by pensions funding problems were likely to moderate in 2005 and 2006.

"Amid all the bad news about pensions, these findings give reason for a little cautious optimism," said Ian McCafferty, chief economic adviser at the CBI.

"Firms are still having to make sizeable financial provisions to make up the shortfalls in pensions schemes but the problem is more under control.

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