European pension deficits soar in 2011; schemes facing “one burden too many” in 2012
30 November 2011
The combined pension deficits of the FTSE 100 Global companies soared by over 70 per cent in the past year to €290 billion according to the European Pensions Briefing report published today by LCP.
Haugh said the authorities were "leaning toward" the risk reserve requirement "in a nod to Solvency II" and estimated that this could add 20% to the costs of running a DB scheme.
The alternative of a tougher funding standard - the minimum funding standard is already set at buyout level - could add as much as 50% to costs, he added.
Employers will have to consider increasing contributions to cover reserves or reducing benefits, he warned.
"This is what's driving de-risking in Ireland," he said. "Until now, closure to new accruals has not really been seen in Ireland, but we expect to see that change. We think this is going to push closure to new accruals and buyout in Ireland."
Investment & Pensions Europe
19 May 2011
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