The pension deficit in the FTSE 350 rose by almost a quarter in 2005 to 93 billion ' despite strong equity market growth, according to Mercer Human Resource Consulting.
The news comes just weeks after Rentokil Initial, Arcadia and Co-operative Group announced they were either abandoning final salary schemes or taking measures to reduce the costs.
It had been thought that strongly performing markets would be enough to wipe out the pension scheme deficits but now it appears that liabilities are growing so quickly, it will be difficult to offset them.
The problem is that although employers have been able to close final salary schemes to new employees, their ability to cut off existing employees from future benefit accruals is something that remains untested in the courts. It is possible that any...