JLT EB's monthly fund index update for November 2015

01 December 2015

1 December 2015: 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 November 2015, JLT estimates the total DB pension scheme funding position as follows:

At 30 November 2015

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£543bn

£626bn

(£83bn)

87%

FTSE 350 Companies

£614bn

£710bn

(£96bn)

86%

All UK Private Sector Pension Schemes

£1,244bn

£1,508bn

(£264bn)

82%

For comparison, the corresponding figures as at 30 November 2014 are as follows:

At 30 November 2014

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£542bn

£616bn

(£74bn)

88%

FTSE 350 Companies

£613bn

£698bn

(£85bn)

88%

All UK Private Sector Pension Schemes

£1,235bn

£1,453bn

(£218bn)

85%

Charles Cowling, Director, JLT Employee Benefits, comments:

“Deficits have widened again this month as the Bank of England has once again pushed back expectations for a rise in interest rates. Continued mild deflation is certainly not putting any pressure on the Bank to raise interest rates any time soon, nor do the economic gloom in Europe and the continued sluggishness of emerging markets.

“This is hurting UK pension schemes. In the last two months alone, the outlook for interest rates 18 months hence as reflected in market prices has fallen 0.5%. This has serious consequences because UK pension schemes still have a huge exposure to interest rates despite their significant activity in LDI and other hedging investment strategies. In effect, the UK pensions industry continues to take a very large position - some might even call it a bet - that interest rates will rise faster than the market expects. Trouble is, this is a position which month after month, since the start of the financial crisis, pension schemes have got wrong. Maybe it’s time for pension schemes to bite the bullet and stop betting against markets.

- ENDS -

Notes to Editors 

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