JLT EB's monthly fund index update for September 2015

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

At 30 September 2015  Assets  Liabilities  Surplus/ (deficit)  Funding Level
 FTSE 100 Companies  £533bn  £606bn  (£73bn)  88%
 FTSE 100 Companies  £601bn  £686bn  (£85bn)  88%
 All UK Private Sector Pension Schemes  £1,205bn  £1,452bn  (£247bn)  83%

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

 At 30 September 2014  Assets  Liabilities  Surplus/ (deficit)  Funding Level
 FTSE 100 Companies  £525bn  £591bn  (£66bn)  89%
 FTSE 100 Companies  £594bn  £670bn  (£76bn)  89%
 All UK Private Sector Pension Schemes  £1,186bn  £1,393bn  (£207bn)  85%

Charles Cowling, Director, JLT Employee Benefits, comments:

“The Fed’s decision to keep interest rates at rock-bottom level for longer has done little to relieve the markets from severe volatility, squashing pension schemes’ hopes that deficits will reduce soon.

“Indeed, there are plenty of reasons to worry about the global economic growth. In Europe, Greece is still in dire straits, even if Tsipras’s decisive win at the general election should provide more political stability and reassurance that the reform plans will be delivered. Meanwhile, China, the world’s second economic power, continues to struggle to stay on the path to greater market liberalisation.

“It is not surprising therefore to see the latest figures on the pension deficits within UK Private Sector Schemes jumping by £40bn from £207bn a year ago to £247bn. This highlights the continuing challenge of managing DB pension risks and deficits in the UK. With just under half of DB pension assets still invested in equities, pension schemes are exposed to a huge amount of market volatility, potentially leading to big losses that can further widen the deficit gap.

“Companies and trustees should continually be on the lookout for ways to reduce pension risk and explore any opportunity to de-risk their pension scheme. Some pension schemes have indeed made great efforts to reduce their pension risks and have been rewarded with lower deficits and less volatile balance sheets – Smiths Group, which announced its latest results last week highlighting a lower pension deficit, is one such example. Other companies would do well to follow their lead.”

- 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