Fujitsu injects 800 million pounds to plug UK pension deficits

LONDON Mon Mar 25, 2013 3:28pm GMT

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LONDON (Reuters) - Japanese IT conglomerate Fujitsu has injected 800 million pounds into three of its UK defined-benefit pension schemes, halving their deficits and freeing up cash for its UK arm to boost investments.

Fujitsu, the UK's biggest Japanese employer with 14,000 staff, said in a statement on Monday that the 800 million pounds would "substantially improve the funding positions of these schemes, benefiting over 21,000 members."

The company has also negotiated reduced ongoing annual contributions with the pension scheme trustees.

Companies across the UK are battling with bulging pension deficits.

Record low bond yields - driven by repeated rounds of quantitative easing by the Bank of England - and the UK's volatile economic climate have further complicated the ability of corporate schemes to keep pace with rising life expectancies.

Company pension liabilities now stand at 50 billion pounds for Britain's top 100 firms, compared with 55 billion pounds in June 2012 and 42 billion pounds a year ago, according to data from JLT Pension Capital Strategies.

Defined benefit pensions are employer-sponsored plans where how much employees finally receive is based on a formula using factors such as salary history and years of employment, rather than on how much has been invested in the scheme over time.

Fujitsu provides IT systems and services to Britain's private and public sectors. Over the past year it has hired 1,800 people, one third of whom were workers under the age of 25, and it said it intends to keep up that level of recruitment.

(Reporting by Tommy Wilkes; editing by Patrick Graham)

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