Industrial giants hardest hit by pension deficits says Barnett Waddingham

The research, conducted by actuary Barnett Waddingham, analysed the position of FTSE 350 companies, highlights the impact that old fashioned salary-related pension schemes are having on UK businesses as a whole. The key findings relating to the industrial sector include: -Average contributions by industrial companies to meet their pension scheme deficit represented 40% of free cash flow, compared with 18% for the FTSE 350 as a whole. -Industrials are the most heavily affected by pension scheme deficits, severely compromising their ability to raise finance. -The impact of losses in the equity value for industrial company pension funds was the second highest among the sectors, at around 30%. The impact for many other sectors was below 5%. The firm's Chris Hawley (pictured) said that despite the substantial amount of contributions already paid, so-called defined benefits (DB) scheme deficits remained a concern for industrial companies. "A small number of high profile companies in this sector are often highlighted for the size of their DB pension obligations, but our research shows they are by no means alone," he added.