WS Atkins pension fund deficit put at £213m

If you’re a pensioner – or a future pensioner – in the WS Atkins pension scheme, the good news is that the consultancy group recognises that you are expected to live longer than every before.

Longevity at age 65 for current pensioners had been based on 19 years and now that figure has been lifted to more than 22 years.

We’re talking about males here as the figures for women are higher again: women are expected to live, on average, for almost 25 year, whereas a year ago Atkins was working on a figure of 22 years.

Assumptions for existing employees (current age 45 years) are that much higher:

• 24 years for males (previous figure: 21 years)
• 27 years for females (previous figure: 24 years)

Atkins’ pension scheme has one of the biggest deficits in the construction industry, currently running to £213m.

That shortfall might be bad enough but at least it has come down from £250m 12 months earlier, which was itself an improvement on the figure of £300m a year before that.

Currently the position is:

• obligations of £1,022m
• assets of £809m

The current figures are made on a string of assumptions:

• price inflation – 3.6%
• rate of increase in salaries – 5.1%
• rate of increase for deferred pensioners – 3.6%
• rate of return on assets – 7.3%

Atkins points out that for every 0.5% increase in the actual rate of inflation, from the assumed figure of 3.6% used in the sums, the scheme’s liabilities would jump by 7%.

Likewise if longevity turned out to be longer, for each one-year increase it would lift liabilities by a further 3%.

The deficit is not at the top of the group’s agenda as it has just declared that it will be returning £100m to its shareholders.