Top firms seen facing 80 bln pound pension risk

LONDON (Reuters) - Britain's blue-chip companies are putting at risk up to 80 billion pounds in final-salary pension schemes over the next 12 months as they place heavy bets on investments mainly in equities and property, consulting firm Deloitte said on Thursday.

The figure is an estimate of the maximum loss which pension funds at firms listed on London's FTSE 100 index could face in the event of adverse market movements.

Many pension schemes are heavily invested in risky asset classes, such as equities and property, which can yield higher returns over the long term but are volatile and could force firms to pump in cash to plug gaps if their values slump, Deloitte said.

Between June 2007 and June 2008 UK commercial property values fell by nearly 20 percent, while the FTSE All Share index fell by over 11 percent.

The aggregate funding of UK firms' pension schemes from a surplus of 15 billion pounds at the start of the year to a deficit of 23 billion pounds now, partly because of sliding equity markets, Deloitte said.

FTSE 100 firms on average are risking about 8 percent of their market value through their pension schemes, Deloitte said. The picture varies widely from company to company, it said, with some having more than 100 percent of their market value at risk.

Industrial firms are at the highest risk of a plunge in their pension schemes' funding, with around 16 percent of their market value in jeopardy, Deloitte said.

Oil and gas companies have a total of 16 billion pounds at risk but their strong market value means that translates only into 6 percent of their value.

Firms and pension trustees should cut the risk in their scheme, through methods such as using bonds or derivatives to match their expected benefit payments or by offloading all or some of their liabilities to a specialist buyout insurer, Deloitte said.

(Reporting by Simon Challis; Editing by Jason Neely)