JLT EB's monthly fund index update for Mar 2016

04 April 2016

JLT Employee Benefits's monthly fund index update for the month of March 2016

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 2016, JLT estimates the total DB pension scheme funding position as follows:

At 31 March 2016

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£546bn

£633bn

(£87bn)

86%

FTSE 350 Companies

£616bn

£717bn

(£101bn)

86%

All UK Private Sector Pension Schemes

£1,250bn

£1,523bn

(£273bn)

82%

For comparison, the corresponding figures as at 31 March 2015 are as follows:

At 31 March 2015

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£556bn

£643bn

(£87bn)

86%

FTSE 350 Companies

£629bn

£729bn

(£100bn)

86%

All UK Private Sector Pension Schemes

£1,281bn

£1,549bn

(£268bn)

83%

Charles Cowling, Director, JLT Employee Benefits, comments:  “Pension scheme deficits remain sky high, despite some recovery in equity markets. Successive reforms introduced by Chancellor George Osborne are threatening to make pensions an endangered species. The changes to the lifetime and annual allowances have made pensions almost irrelevant for high earners;  Freedom and Choice is encouraging people to cash in their pensions; and most recently pensions have become far less attractive for the under 40s in comparison to the Lifetime ISA. It is easy to see why some are saying that George Osborne has a long-term unspoken strategy of getting rid of pensions altogether.

“However, while the Chancellor may indeed be encouraging dramatic reductions in future pension provision, historic pension liabilities refuse to go away and continue to cause angst and major problems for company management and pension scheme trustees alike. As the Bank of England continues to delay interest rate rises, so the deficit increases for those companies and trustees who have chosen not to hedge their exposure to interest rates and inflation. While it is difficult to leave a casino with a large loss, it is equally painful to carry on playing roulette. Companies and pension schemes that have so far been reluctant to hedge their pension liabilities should maybe face the unpalatable truth that it rarely pays to bet against markets. With the outlook for interest rates and economic growth looking less than bright, companies and trustees should look for any and every opportunity to secure and hedge pension liabilities – even if it does mean locking into a loss.” 

 - ENDS -

Notes to Editor

Enquiries:

Smithfield Consultants:

Fay Israsena | T: +44 (0)20 7903 0633| E: fisrasena@smithfieldgroup.com

Julia Cooke | T: +44 (0)20 7903 0674| 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 39 territories with some 9,000 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 charles_cowling@jltgroup.com 0161 242 5388