Pensions: company schemes hit by increasing deficits

http://www.guardian.co.uk/money/2012/sep/24/company-pension-scheme-deficits

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Company pension schemes require an extra three years to plug their increasing deficits, taking the average repayment period to 11 years, according to the latest set of projections made by accounts firm PricewaterhouseCoopers.

The low yields on government bonds, known as gilts, are part of the problem.

Jeremy May, pensions partner at PwC, said: "The difficult market combination of low gilt yields and eurozone uncertainty is hitting pension schemes hard.

"Many companies now face the stark choice of ploughing considerably more cash into their pension scheme, or being saddled with the debt for longer. In many cases, lack of cash availability means the decision is simple."

Just over 90% of the pension schemes surveyed had a deficit and more than half have a higher deficit than at the last time of their valuation.