|PIC1|Company defined-benefit pension schemes swung to a record total surplus at the end of February, on rising corporate bond yields and improved equity markets, pension advisory firm Aon Consulting said on Monday.

The 200 largest company schemes had a total surplus of 21 billion pounds at end-February - an all-time high - from a deficit of 12 billion pounds at the end of January. Of the schemes, 62 percent are now in surplus, Aon said.

The main reason for the improved financial strength was the rising value of AA-rated corporate bond yields, which are the benchmark for measuring pension scheme liabilities.

"They currently stand at a seven-year high of 6.75 percent, which is 1 percent higher than they were at 31 December 2007," Marcus Hurd, a senior consultant at Aon Consulting, told Reuters.

"The equity market has also recovered from its depths when the deficit was at its highest during January," added Hurd.

But February's record surplus would be transformed into a deficit of 180 billion pounds if the data were recalculated according to proposals by the Accounting Standard Board (ASB) to change pension schemes' accounting and to tougher mortality assumptions recommended by The Pensions Regulator, Aon said.

Among the changes being proposed by the ASB is that pension liabilities should be calculated using the risk-free rate, based on gilt or treasury bond rates, rather than on corporate bonds, which would significantly increase firms' pensions liabilities.

This would add around 120 billion pounds to the 200 pension schemes' liabilities, Aon said.

The Pensions Regulator, meanwhile, wants companies to use more realistic projections of how long employees will live after they retire.

The regulator assumes the average 65-year-old retiring today will live until around the age of 90, five years longer than assumed by most companies.

"These proposals add more pressure on companies to close their final salary schemes to members or find ways to terminate their liabilities," Hurd said.

On Friday, leisure company Rank Group Plc said it had agreed to transfer its defined benefit pension plan to a unit of Goldman Sachs. Rothesay Life, the Goldman unit, said the deal was a breakthrough which could spark others.