JLT EB Funding Level Update July 2015

30 June 2015

Latest Monthly Update

JLT EB 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 June 2015, JLT estimates the total DB pension scheme funding position as follows:

At 30 June 2015  Assets  Liabilities  Surplus/ (deficit)  Funding Level
 FTSE 100 Companies  £536bn  £614bn  (£78bn)  87%
 FTSE 350 Companies  £606bn  £696bn  (£90bn)  87%
 All UK Private Sector Pension Schemes  £1,224bn  £1,477bn  (£253bn)  83%

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

 At 30 June 2014  Assets  Liabilities  Surplus/ (deficit)  Funding Level
 FTSE 100 Companies  £517bn  £576bn  (£59bn)  90%
 FTSE 350 Companies  £582bn  £650bn  (£68bn)  90%
 All UK Private Sector Pension Schemes  £1,159bn  £1,333bn  (£174bn)  87%

Charles Cowling, Director, JLT Employee Benefits, comments:

“As we come ever closer to a “Grexit” from the Euro, the rattled financial markets certainly aren’t helping the funding position of pension schemes.

“Total pension scheme deficits are slightly down on a month ago, but deficits are still significantly higher than a year ago. There are signs that pension schemes are increasingly implementing LDI solutions to hedge out interest rate and inflation risks – even though this means “locking in” to current yields. But with markets looking increasingly uncertain, companies and trustees are quite reasonably concluding that running significant risks on interest rates and inflation (and thereby betting against market prices) is a mug’s game which is best avoided.

“Even if LDI solutions are increasingly reducing interest rate and inflation risks, companies and trustees are still in for a “white knuckle ride” in markets, as pension scheme deficits swing up and down with every twist and turn in the saga of Greece, its debts and the European currency union. Beware Greeks bearing gifts (or bailout proposals) seems to be the lesson being taken to heart by the EU – and possibly too by companies and trustees of DB pension schemes.”

- ENDS -

Notes to Editors 

Enquiries:

Smithfield Consultants:

Fay Israsena

fisrasena@smithfieldgroup.com

+44 (0)20 7903 0633

Julia Cooke

jcooke@smithfieldgroup.com  +44 (0)20 7903 0674&

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