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Asset-backed pensions top £5bn

Research has found that asset-backed financing for pension schemes is increasingly the weapon of choice for businesses, as they battle to reduce their pension deficits.

Asset-backed financing saw contributions of more than £5 billion in the past two years alone.

KPMG predicts that up to half the FTSE 100 could take up the method, under which a sponsoring employer uses business assets to generate cash which is then paid to the pension scheme.

Contributions could, says KPMG, rise above £10 billion by the year 2016.

Mike Smedley, pensions partner at the organisation in the UK, said: "This type of financing is becoming increasingly popular as businesses battle to reduce their pension deficits."

Copyright © Press Association 2011

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