Top companies facing billions of pounds pension risk
Released on: July 28, 2008, 12:13 am
Press Release Author: Gracy
Industry: Financial
Press Release Summary: Scores of blue-chip companies are facing risks to their 80 billion pounds invested in their \'final salary\' pension schemes in the coming year.
Press Release Body: London (ask4loan) July 25, 2008: Many big names in the field are facing multi-billion risks on their pension schemes because they had put big bets on investment in consulting, equities and property sectors.
It is the estimated figure which the pension funds, listed on the FTSE 100 Index, might bear in losses in the case of severe market movements. Various pension schemes have made big investments in the \'risky assets\' classes like equities and property, which have the possibility of providing good returns over a long period of time; but due to their volatile character might force the companies to pump fat amounts of cash to plug the financial gaps born of economic slump.
Between the period June 2007 to June 2008, values of commercial,property fell by about 20 percent; while the FTSE All Shares Index (FTAS) fell by 11 percent. The aggregate financing of the British firms\' pension schemes plummeted down to a deficit of 23 billion pounds this year from the previous year figure of 15 billion pounds surplus.
In fact, 8 percent of the market value of the pension schemes of FTSE 100 firms is under cloud. The situation varies from company to company; some of the firms even have 100 percent of their market values under the risk category.
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