The document discusses the pension crisis in the UK. It notes that 80% of company pension schemes are seriously underfunded, with total deficits estimated at £73 billion. It also lists factors contributing to the pension crisis, such as the financial crisis of 2007, increasing lifespans, and historically low interest rates outpacing gains in pension assets. The document encourages readers to evaluate their own pension situations and contact the author to discuss possible solutions.

1. Financial planning for each one of us is a matter of personal choice. Each
of us has to assume responsibility for his/her own future…”
‘The Pension Gap in Europe’
Aviva/Deloitte, September 2011
UK Pension FACTS to consider
1. 80% of company schemes are now seriously in deficit. As a result the
amount of pension you actually receive in retirement could be
significantly less than you are expecting.
2. The total deficit in FTSE 100 pension schemes (March 2012) is
estimated to be £73 billion.
3. The UK has 7,800 pension schemes and 1,184 have gone bust due to
company failure or unsustainable funding ratios.
4. 7 FTSE companies have pension liabilities that are in excess of its
market capital. BA, BT, BAE systems, RBS, RSA Aviva, Lloyds TSB,
gkn, M&S, Barclays,Itv and Sainsbury’s. This represents a serious risk
to business.
Factors contributing to the crisis
1. Financial crisis of 2007 of course is a contributing factor.
2. Longevity factor – there has been a steady rise in life expectancy.
This is the single most influential factor.
3. The increase in liabilities far outpaces gains in pension assets. In
March of 2011 FTSE 100 pension schemes had a deficit of £38 billion.
One year later this figure is estimated to now be £73 billion, following
significant funding contributions (e.g. £1.8b Barclays) from
companies at a time when many have little spare cash.
4. Most defined benefit plans are closed to new entrants.

2. 5. Changes in pension rules and accounting practices, such as BAE’s
introduction of LAF or longevity adjustment factor, significantly
reduce benefits payable. Changes to CPI from RPI also play a role.
6. Asset allocation and historically low interest rates.
Questions you should ask yourself
1. Do you know that defined benefit pension are not guaranteed?
2. When did you see your last valuation? How have your investments
performed?
3. When can you access your pension?
4. Do you like paying a high rate of tax on your money?
5. What will happen to your pension when you die?
There are solutions today for your pension problem.
Kevin McNee 646-664-0687 kevin.mcnee@devere-group.com