The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Pension deficits offer M&A poser

Pension deficits in FTSE250 companies fell from £74 billion ($137 billion) to £64 billion over 2003 according to research by Mercer Human Resource Consulting.


Tim Keogh, European partner at Mercer comments, ?more companies now realize that deficits will not go away by themselves. They are gritting their teeth and recognizing the need to increase contributions. It would be great if equity markets suddenly boomed again or if bond markets offered the higher long-term yield that would make deficits disappear. But sensible financial planning need to be based on more than hope, and the markets are likely to address only part of the problem.?


Pension deficits have become an increasing concern for companies in the context of M&A activity, because the added liability could affect the deal value. Investors hope that the introduction of the UK government Pension Bill in two weeks will clarify matters. The effects and implications of this are discussed in greater detail in the Market Focus section of the July issue of CF


Optimism is also starting to filter through from senior executives in charge of pensions at FTSE 350 companies. Recent research by conducted by Consensus Research on behalf of Aon Consulting, a UK based insurance broker, highlighted that more than three quarters (77%) are confident that deficits will improve for their company?s pension funds over the next three years.




You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree