The total deficit of FTSE 250 pension schemes has doubled in the last 12 months to £12bn, according to research by Pension Capital Strategies and Cazenove.

Of the FTSE 250, only 92 continue to provide some current employees with defined benefit (DB) pensions, and of these only 20 companies are still providing DB schemes to a significant number of employees.

The research also found that these schemes are continuing to move out of equities and into bonds, with the average pension scheme asset allocation to bonds seeing an increase of seven per cent, from 42 per cent last year to 49 per cent in 2009. Thirty-eight FTSE 250 companies said they had increased their bond allocations by more than ten per cent.

Companies are also beginning to view their pension scheme as a material risk to their business, with 27 companies reporting total disclosed pension liabilities greater than their equity market value.

The total disclosed pension liabilities of the FTSE 250 companies have also reportedly fallen from £57bn to £55bn. Fifteen of the companies disclosed liabilities of over £1bn, and 109 companies had no DB scheme at all.

The report stated: 'The possibility of measuring pension liabilities on a risk-free basis (i.e. using gilt-based discount rates rather than AA bond discount rates) has been debated at length, including in the detailed discussion paper from the Accounting Standards Board last year.
'In the UK, a company can no longer default on its promises to pension scheme members unless it goes into liquidation (in which case it is likely there is no value left for shareholders). It is therefore difficult to see that shareholders get any value out of their (very limited) ability to default on pension promises, and so applying a discount rate which allows for a probability of default is illogical.

'If pension liabilities were to be measured on a risk-free basis, we estimate that it would add around 50 per cent of the total pension liabilities, i.e. increasing the total disclosed pension liabilities from £55bn to over £80bn.'

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