JLT EB's monthly fund index update for October 2015

01 November 2015

Latest Monthly Update

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

At 30 October 2015  Assets  Liabilities  Surplus/ (deficit)  Funding Level
 FTSE 100 Companies  £537bn  £606bn  (£69bn)  89%
 FTSE 100 Companies  £606bn  £686bn  (£80bn)  88%
 All UK Private Sector Pension Schemes  £1,226bn  £1,452bn  (£228bn)  84%

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

 At 30 October 2014  Assets  Liabilities  Surplus/ (deficit)  Funding Level
 FTSE 100 Companies  £527bn  £595bn  (£68bn)  89%
 FTSE 100 Companies  £596bn  £675bn  (£79bn)  88%
 All UK Private Sector Pension Schemes  £1,194bn  £1,402bn  (£208bn)  85%

Charles Cowling, Director, JLT Employee Benefits, comments:

“Huge efforts have been made by pension schemes and their sponsoring companies to shore up deficits but they remain stubbornly high. Even as the UK’s largest private sector pension schemes, such as Tesco's, are closing, billions of additional funding have been poured into those funds and huge amounts of time and money have been spent trying to improve the matching of pension assets to liabilities through LDI strategies and longevity swaps. Yet even with the relief of reasonable investment returns and the latest announcements on longevity showing that there has been a slowing down in the pace of mortality improvement, deficits are almost unchanged from a year ago.

"Worryingly, the situation could get even worse. The Bank of England has hinted that interest rate rises could be delayed still further due to the combined impact of ultra low inflation and global economic uncertainty. This would be bad news for pension schemes. JLT Employee Benefits has calculated that if interest rates rise just 12 months behind market expectations, liabilities across UK private sector pension schemes would soar by more than £60billion. This shows that companies and pension schemes need to do even more, through LDI strategies and the like, to protect themselves against the lottery of interest rate risks.

- 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