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Final Salary Pension schemes recover

Final Salary Pension schemes recover
Friday, 14 January 2011 00:00

In December company pension funds showed a marked improvement in the state of their finances, a new report has revealed.

The Pension Protection Fund (PPF) reports that the 6,560 final salary pension schemes operating in the private sector have transformed a deficit of £1 billion into a surplus of £22 billion.

The increase was the result of a 3.4 per cent rise recorded in the value of assets in the last month of 2010. However, the cost of paying for pensions climbed too but only by 1 per cent.

The PPF said: "During the month of December there was a 3.4 per cent increase in assets mainly due to rising UK and global equities. However, liabilities also increased by 1 per cent due to the combination of falling index-linked gilt yields and the time value of liabilities."

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