Defined benefit (DB) pension liabilities at the UK’s biggest companies have grown by £95 billion, at a time when some firms are paying more to shareholders than they do funding their scheme.
According to JLT Employee Benefits, the total cost of pension liabilities among FTSE 100 companies grew to £681 billion in 2016, The Daily Telegraph reports.
A separate report by Barnett Waddingham found the aggregate pension deficit of FTSE 350 firms grew by £12 billion in 2016, to £62 billion. It said this figure was equivalent to 70% of those companies’ pre-tax profits for the year.
Last week a report by Lane Clark & Peacock, found that in 2016 FTSE 100 companies paid £13.3 billion in pension contributions, but £71 billion in dividends.
The report claimed that in 2015 nearly a third of FTSE 100 companies could have used the cash they spent on shareholder dividends to eliminated their pension deficits.