Aon Hewitt research: Final salary pension scheme deficit is closing up

The pensions deficit of the 200 largest privately-sponsored final salary schemes has reached its smallest level since September 2009, according to research from Aon Hewitt.

The deficit stood at £69 billion at the end of October, compared to the £80 billion deficit recorded on 30 September 2010.

According to the research, the improvement is mainly due to buoyant equity markets while bond markets have remained relatively stable.

Marcus Hurd, principal and actuary at Aon Hewitt, said: “This good news has been a long time coming for many UK businesses whose final salary schemes have struggled with volatile market conditions in recent months and ongoing uncertainty.

“What will be telling is what businesses decide to do with this positive news and whether they put pressure on scheme trustees to adapt their investment strategies in the final two months of the year.

“Those with strong and more positive views of the market will be looking to capture further gains before the year is out, whilst others will be seeking to protect against losing gains that have been made on the year to date.”

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