The headlines will say that the size of the pensions shortfall faced by the UK's biggest companies has shrunk by a quarter over the last year. But look a little deeper and the real picture just getting worse and worse.
Actuarial consultants Lane, Clark & Peacock (LCP) have calculated that the collective deficit faced by FTSE 100 companies with final salary pensions fell to £42bn from £55bn during the year to the end of July as the stock market rose and firms doubled the amount they paid into the schemes.
But as LCP partner Bob Scott, said, the headline figure is a smokescreen because it does not take into account the full liabilities or the impact of increasing life expectancy.
"We read a lot that people are living too long and this has increased deficits," he said. "We don't know what allowance companies have made in their accounts for that - they don't have to say. The £42 billion deficit calculated on an FRS17 basis is not the full story."
Factor the impact of growing longevity and the £42bn deficit could rise by a further £20bn. Indeed, LCP says, the real level of deficit could rise to as much as £127 billion, more than twice the total of pre-tax profits earned by the FTSE 100 last year.
Meanwhile, FTSE 100 firms have an average of only £84 of assets for every £100 of liabilities and the FTSE 100 share index would need to climb above 5900 for the combined deficit to be eliminated.
For some firms, the situation is much worse. BT's liability is more than double its market capitalisation (219 per cent), while insurer Aviva has liabilities of 59 per cent of market capitalisation and Lloyds TSB has liabilities of 55 per cent.
Ten companies also have pensions deficits in excess of a quarter of their stock market value, including BAE Systems, British Airways, BT, ICI, Rolls-Royce and Royal & SunAlliance.
Only four of the 89 FTSE 100 companies with final salary schemes reported a pension surplus in their 2003 accounts.
LCP also calculated that although FTSE 100 firms paid an additional £10bn in contributions, only £3bn of this went towards reducing the deficit and the rest wne towards meting liabilities.
The figures broadly tally with an analysis published last month by RBC Capital Markets which found that although companies paid £11.6 billion into their schemes during the 2003 – almost double the amount paid in 2002 – after paying £7.3 billion in pensions and £3.5 billion in interest on the shortfall, less than £1 billion was left to reduce deficits.
The RBC report, written by Jon Ralfe, the former Head of Corporate Finance at Boots, also pointed out that the majority of the increase in the overall level of contributions was down to a small number of firms making large payments, with five companies paying in £4.5 billion.
Indeed while the collective shortfall calculated by Mr Ralfe fell from £66bn pre-tax to £60bn pre-tax, two-thirds of FTSE 100 companies actually saw their pensions fund deficits worsen during 2003.
The implication of both sets of figures is that the only way firms can reduce their deficits is through large one-off contributions. But as LCP's Chris Tavener said: "The improvement in pension deficits has come at a big price for some blue chip companies and it's difficult to see companies sustaining these increased levels of contribution in the future."
And he warned, ultimately "it will be a question of who is more important, the shareholders or the pension scheme members."