FTSE 350 oil and gas companies are paying less towards meeting their pension shortfalls than at any time since 2009, according to new research.
Of all the sectors covered by consultancy Barnett Waddingham’s annual survey, oil and gas was responsible for the biggest decrease in disclosed accounting deficits.
Deficit contributions as a proportion of dividends were the lowest of all industries represented in the FTSE 350 at just 2%.
The aggregate amount paid towards reducing defined benefit (DB) deficits in 2015 represented 14p for every £1 spent on pension provision, the report said.
Nick Griggs, head of corporate consulting at Barnett Waddingham, said: “Whilst deficit contributions for the sector have fallen to the lowest level since our research began in 2009, they still represent a significant cost for FTSE 350 companies.
“The oil and gas sector has had a tough time recently with falls in profits across the FTSE 350 and it is unsurprising to see reductions in deficit contributions. This volatility is set to continue – especially with the added uncertainty of Brexit. The future funding needed to meet DB pension obligations is another unwelcome area of uncertainty magnified by the vote to leave the EU.
“FTSE 350 companies play an important part in supporting their former employees in their retirement with payments of over £20billion being made to pensioners in 2015 − a significant amount when compared to the c£90billion paid by the government in state pensions.”