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

02 May 2017

Pension scheme deficits remain stable despite political uncertainty

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 30 April 2017, JLT estimates the total DB pension scheme funding position as follows:

At 30 April 2017

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£656bn

£716bn

(£60bn)

92%

FTSE 350 Companies

£745bn

£816bn

(£71bn)

91%

All UK Private Sector Pension Schemes

£1,571bn

£1,753bn

(£182bn)

90%

For comparison, the corresponding figures as at 30 April 2016 are as follows:

At 30 April 2016

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£569bn

£622bn

(£53bn)

91%

FTSE 350 Companies

£650bn

£713bn

(£63bn)

91%

All UK Private Sector Pension Schemes

£1,335bn

£1,518bn

(£183bn)

88%

Charles Cowling, Director, JLT Employee Benefits, comments: 

“Markets have been surprisingly stable at a time of political uncertainty in the UK and across Europe. As a result whilst pension deficits remain high due to quantitative easing and record low interest rates, they have remained pretty much at their current levels for some time now. This is despite the threat of inflation caused by the devaluation of sterling and rising import prices which is likely to flow through to higher pensions.

On the positive side, depending on your perspective, the latest mortality tables from the CMI suggest that life expectancy is perhaps not increasing as much as had been expected and this will reduce deficits. But with many pension schemes now embarking on their triennial actuarial valuations and deficits likely to be much bigger than three years ago there are going to be some difficult discussions between companies and pension scheme trustees, as trustees could be looking to negotiate significant increases in deficit funding.

- 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?).  

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