Company pensions suffer 27-year low
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Your support makes all the difference.Company pension funds have suffered their worst performance in 27 years, figures released yesterday showed.
Company pension funds have suffered their worst performance in 27 years, figures released yesterday showed.
The value of pension schemes for large companies fell for the second year running during 2001, according to the investment information provider Russell/Mellon, which examined the results of 1,651 pension funds across the UK with combined assets of £352bn.
The group said the last time pension funds had suffered two consecutive years of negative returns was in 1973 and 1974, when stock markets were crippled by the oil price shock and the secondary banking crisis.
According to Russell/Mellon, the value of pension scheme investments fell on average by 9.7 per cent last year, after dropping by about 1.4 per cent in 2000.
The FT all-share index fell by 15.41 per cent last year, and by 7.97 per cent in 2000, so pension fund managers can claim that they did better than average. They control such large sums that it is difficult for them to increase their funds' values when markets as a whole are on the slide.
But that is little consolation for millions of pension fund members, who have already been battered by controversy over annuities, the end of final-salary schemes and the debate over whether it is better to be in or out of the State Second Pension. Andy Fleming of the National Association of Pension Funds said: "People shouldn't panic. There will inevitably be short-term ups and downs in the stock market, but in the long-term we would expect stocks and shares to increase."
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