The Top 10 Largest Pension Liabilities

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There’s no doubting that pension schemes have grown significantly in recent years. Attempts made by companies to stem the growth of pension liabilities by closing defined benefit schemes to new staff have had little, if any impact. The affect of higher life expectancy, low gilt yields, and other economic factors have contributed to the spiraling growth in pension liabilities.

Below is a list of FTSE 100 companies currently with the largest pension liabilities (£m).

  1. Royal Dutch Shell                     57,492
  2. BT                                                   50,350
  3. Lloyds Banking Group             36,903
  4. RBS                                                35,152
  5. BP                                                   32,662
  6. BAE Systems                              29,236
  7. Barclays                                       28,279
  8. HSBC                                            25,896
  9. National Grid                             25,561
  10. IAG                                                20,391

Furthermore, and perhaps even more worrying, the following companies have pension liabilities larger than the actual market value of the company. The figures shown are the difference between pension liability and market value of the company (£m).

  1. BAE Systems                               13,262
  2. IAG                                                  10,350
  3. RBS                                                 9,175
  4. HSBC                                              9,127
  5. BT                                                    6,660
  6. Rolls-Royce                                   206

In the case of both BAE Systems and International Airlines Group (IAG), total pension liabilities are almost double their market value, meaning the company would have to be sold twice over in order to fill the pension deficit.

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If you have a pension from one of the above mentioned companies, or would like to find out how well your pension is funded, you can contact me on the below channels.

  • +971508569201
  • christopher.keeling@devere-acuma.com
  • Twitter: @ckadvisor
  • LinkedIn: Chris Keeling DipFA CeSRE
  • Blog: christopherkeeling.wordpress.com
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