Most companies in the FTSE 350 can manage the costs of their defined benefit pension schemes but far too many of them are taking investment risks for which there are few rewards, according to a report to be released this week.

The report, conducted by actuarial consultants Hymans Robertson and based on the companies’ 2010 annual reports, concludes that even with the volatility in markets seen in August 2011, little has changed in the pension funding position since the end of December 2010. That is partly because the gap between yields on government bonds and those on corporate bonds has widened, which has the effect of reducing liabilities.

“Notwithstanding the considerable market volatility over the past few months, the aggregate FTSE 350 deficits (measured according to international accounting standards) at August 31 2011 remains £43bn ($69bn), with falling asset values being compensated for by rising credit spreads on the corporate bonds used to measure liabilities,” the report concludes.

Clive Fortes, head of the corporate practice at Hymans Robertson and lead author of the report, said that the vast majority of companies were able to manage their pension obligations, in part because they had been putting extra cash in.

But the overall picture masks a more extreme situation at several companies. For example, 80 per cent of companies have a pension shortfall, as calculated under the IAS 19 accounting standard, that is less than 10 per cent of their market capitalisation. However, two – Thomas Cook and Premier Foods – have deficits that are more than 100 per cent of their market capitalisation.

And while 75 per cent of companies could pay off their deficit in full with less than half a year’s earnings, the report says that it would take Dixons Retail more than 14 years of profits to pay off its deficit in full. WS Atkins would need three years of profits, as would Taylor Wimpey.

Also, it appears that some companies with the most underfunded schemes are taking the biggest bets in their investment strategy. This is measured by “unhedged liabilities” – the amount of pension liabilities covered either by relatively risky assets such as equities or by no assets at all.

According to the report, 95 per cent of companies have unhedged liabilities that are smaller than their market capitalisation. But Premier Foods, International Airlines Group and Thomas Cook all have unhedged liabilities that are more than twice their market capitalisation.

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