More pension scheme deficits likely

New proposals by the UK Accounting Standards Board (ASB) to use a risk-free discount rate to value liabilities will send the deficits of defined benefit pension schemes soaring and could lead to increased closures of pension funds, say analysts.

The proposals would add £120 billion to the combined deficit of the UK's 200 largest pension schemes and reduce the proportion of schemes in surplus from 40% to 2%, according to Aon Consulting. The deficit for these schemes stood at £42 billion as of Jan