The UK's top 100 companies have a group pension scheme deficit of GBP36 billion despite record contributions during the year, a study by actuarial consultants Lane Clark & Peacock (LP&C) has found.

Despite a record 12% increase in employer contributions to GBP12.5 billion in 2005, along with stock market growth, the combined pension fund deficit of all FTSE 100 companies fell by only GBP1 billion to GBP36 billion in the year to July, the report says.

The volatility of the markets saw the deficit reach GBP54 billion in January and then fall to GBP29 billion in April before settling at GBP36 billion in July. Nevertheless, the report predicts that the companies remain on track to clear their deficits by 2012.

HSBC’s GBP1.3 billion and Royal Dutch Shell’s GBP702 million were the largest contributions. Just five of the top 100 companies recorded a pension scheme accounting surplus: Associated British Foods, Gallaher Group, Johnson Matthey, Old Mutual and Schroders.

Three companies were said to have a pension deficit equivalent to or at 30% of their market value, which were British Airways, BAE Systems and ICI.

LP&C also said the majority of Britain’s 100 biggest companies will shut their final salary pension schemes to their current workforce as well as new members within six years.

So far Rentokil Initial is the only one to have closed its gold-plated scheme to existing employees and LPC predicts that many more will follow suit before 2012 in a bid to cut the growing pension costs.