It has been recently reported that almost a quarter of the biggest companies on the stock market, will not be able to pay off their pension deficits.

According to KPMG 22% of firms in the FTSE 100 share index will not be able to find the spare cash to make the necessary payments to pensions.

The problems facing company pensions schemes, will force many to close their final-salary schemes to existing members of staff.

It has come to light that many FTSE 100 companies are paying as much into pensions to rid themselves of the deficit as they are in contributions.

KPMG have predicted that £4 out of every £5 will go towards clearing the debts. This gives more ammunition to a reason for companies to opt out of final-salary pension schemes and go for defined-benefit schemes.

Barclays, Morrisons, Fujitsu, IBM and Dairy Crest have been some of the companies who have closed their final-salary pension schemes to existing employees and new recruits. It seems that the problem extends to the Royal Mail pension scheme too. Senior management have suggested that they too will close their pension schemes to all UK postal staff.

According to the figures released by KPMG, the combined pension deficit of the FTSE 100 index companies stood at around the £80 billion mark at the end of June. When compared with £20 billion from the end of 2007, you can see the problem.

The economic downturn has seen revenues and company assets fall, so it is no wonder that pensions are in this much trouble.

The problems has been highlighted by BT, whose deficit doubled in 3 months to £8 billion and BAE Systems whose deficit rose to £3.1 billion in the first half of 2009.

If the pension deficit of the FTSE 100 index firms wasn’t bad enough, it is estimated that of all of the UK’s 6,400 final-salary schemes, the debt was closer to £158 billion.

Billions of pounds have been pumped into company pensions over the past few years to pay off deficits, but it seems as though this has been too little too late.