JLT's monthly fund index update for the month of March 2017

04 April 2017

Latest mortality tables give boost to hard pressed pension schemes

JLT Employee Benefits (JLT) has updated its monthly index, showing the funding position of all UK private sector defined benefit (DB) pension schemes under the standard accounting measure (IAS19) used in company reports and accounts.

As at 31 March 2017, JLT estimates the total DB pension scheme funding position as follows:

At 31 March 2017

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£657bn

£713bn

(£56bn)

92%

FTSE 350 Companies

£746bn

£813bn

(£67bn)

92%

All UK Private Sector Pension Schemes

£1,575bn

£1,747bn

(£172bn)

90%

For comparison, the corresponding figures as at 31 March 2016 are as follows:

At 31 March 2016

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£570bn

£617bn

(£47bn)

92%

FTSE 350 Companies

£651bn

£707bn

(£56bn)

92%

All UK Private Sector Pension Schemes

£1,341bn

£1,504bn

(£163bn)

89%

Charles Cowling, Director, JLT Employee Benefits, comments: “The latest mortality tables published by the independent experts at the CMI[1] last week showed that we are not living quite as long as had been predicted a few years ago. Indeed, what had been put down to a blip in mortality data caused by a hard winter and some bad flu experience now may be part of a longer-term trend. For the last two or three decades pension schemes have had to face escalating pension liabilities and deficits caused by ever increasing life expectancy. However, the peak in longevity improvements was more than 10 years ago and the last five or six years have seen very little improvement in longevity.

“This potentially could have a huge impact on pension schemes and we have responded by reducing our estimate of the total deficit in UK private sector pension schemes by more than £60 billion at the end of March. In a period when Article 50 was triggered and many voices of doom had predicted chaos in markets and more trouble for pension schemes, we have in fact seen fairly calm markets and a boost to pension schemes in the form of these latest mortality tables.

- ENDS -

In a recently published whitepaper, JLT Employee Benefits has offered a number of recommendations to achieve what we believe would help to address those DB pension sustainability issues. If you’d like to request our whitepaper – please find a link here (JLT: How do we get out of this Pensions Black Hole?).

[1]The CMI or Continuous Mortality Investigation Limited is part of the Institute and Faculty of Actuaries.

Notes to Editor

Enquiries:

JLT Employee Benefits

Corinne Gladstone, PR Manager| T: +44 (0)20 7895 7705| E: corinne_gladstone@jltgroup.com

Smithfield Consultants:

Julia Cooke | T: +44 (0)20 7903 0631| E: jcooke@smithfieldgroup.com 

About JLT Employee Benefits

JLT Employee Benefits is one of the UK's leading employee benefit providers offering a wide range of benefit and pension services, including administration, actuarial and pension consultancy, investment, Self Invested Personal Pensions (SIPPs) and Small Self Administered Schemes (SSASs) administration, flexible benefits, healthcare, benefit communication and financial education.

JLT Employee Benefits employs over 2,200 professionals throughout the UK and in 2013 had revenues of £172m in UK & Ireland.

Pensions and employee benefits companies within the JLT Employee Benefits group of companies include: JLT Benefit Solutions Ltd, Profund Solutions Limited, JLT Wealth Management Limited, JLT Investment Management Limited and Independent Trustee Services Limited. JLT Employee Benefits is part of Jardine Lloyd Thompson Group plc.

www.jltemployeebenefits.com

About Jardine Lloyd Thompson Group plc

Jardine Lloyd Thompson is one of the world's largest providers of insurance and employee benefits related advice, brokerage and associated services. JLT's client proposition is built upon its deep specialist knowledge, client advocacy, tailored advice and service excellence.

JLT is quoted on the London Stock Exchange and owns offices in 41 territories with some 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries.

www.jlt.com


contact Charles Cowling
Director