UK - Pensions deficits for FTSE 350 companies have remained relatively stable over June, despite the destabilising effect of sovereign debt fears, consultants including Aon Hewitt have said.
Both Aon Hewitt and JLT Pension Capital Strategies (JLT PCS) estimated that the UK's leading listed companies had seen pension deficits stabilise at around £40bn, with the former consultancy calculating £44bn shortfalls, while JLT estimated £41bn.
Marcus Hurd, principal and actuary at Aon Hewitt, said the recent volatility was making it harder for pension funds to plan for the long term, with the consultancy estimating there had been intra-day changes to deficits of £6bn.
"European sovereign debt concerns, the release of oil reserves by the International Energy Agency and continued fears over inflation have resulted in a volatile month for pension deficits," he said, noting that the £44bn deficit calculation remained constant from May.
Examining the £63bn deficit facing all private sector defined benefit schemes, Charles Cowling, managing director of JLT PCS, said: "With a collective pension deficit roughly equivalent to the GDP of Vietnam, it is unsurprising there has been a significant reduction in ongoing DB provision in the last 12 months."
Hugh Creasy, director at Xafinity Corporate Solutions, attributed the turnaround, which across the entire Pension Protection Fund universe was estimated to be worth £140bn, to the equity rally seen since June last year.
Additionally, figures released by the Pensions Regulator show employers made £29.1bn in deficit reduction payments in the 12 months after July last year.
However, Creasy noted that investment strategies were likely to see a shift toward bonds in the next few months, as the effect of changes to IAS19 began to be felt.
"Until now, there has been a balance to strike between higher volatility within the balance sheet and lower charges within the profit and loss account," he said, estimating the previous rules had allowed for total savings of £10bn.
He added: "Now that the carrot is being taken away, the move toward bond-related investments is bound to accelerate."
In other news, Gloucestershire local government pension scheme has awarded CB Richard Ellis a new property mandate.
The mandate's initial value ranges between £10m and £30m and will have the potential to increase to £100m.
In a contract award notice, Gloucestershire local government pension scheme said it appointed CB Richard Ellis because it was the most economically advantageous tender in terms of quality presentation, effectiveness in answering questions and demonstration of understanding and willingness to meet clients' needs.
Finally, the pub retailer and brewer Greene King said it has cut its pension deficit by almost 42% over the year to the end of May.
In its latest results, Greene King said its combined liability to its three defined benefits schemes dropped from £78.7m (€87.2m) in May last year to £45.7m.
The pub retailer also said it had agreed with the trustees to increase its cash contribution by £6.6m to £13.6m a year to the pension scheme.
The group's defined benefit schemes were all closed to new entrants by 2005, but Greene King maintains a defined contribution scheme that is open to all new employees.