Half year pension report sees liabilities and deficits increase for Scottish companies

The Skyval Index that looks at the health of defined benefit pension schemes shows the deficits that companies disclose in their accounts are up 40 per cent over the first six months of this year.

For schemes that are agreeing cash contributions at the moment, the deficit increase could mean a rise in employer funding.

Across the UK, by the end of June, the Skyval Index showed funding deficits of all pension schemes totalled £600bn.

Alison Fleming, head of pensions at PwC in Scotland, said: “Our trustee and employer sponsor clients are faced with increased funding costs and more volatile markets for the pension scheme as well as the business supporting it. We’re working with employers and trustees who are in the midst of funding discussions to explore the full range of flexibilities in the UK funding regime including alternatives to cash, for example company assets. All employers and trustees should also be reviewing their schemes and exploring the options available to improve their position as well as to ensure their longer term strategy remains fit for purpose.”