JLT EB Funding Level Update March 2015

31 March 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 31 March 2015, JLT estimates the total DB pension scheme funding position as follows:

At 31 March 2015  Assets  Liabilities  Surplus/ (deficit)  Funding Level
 FTSE 100 Companies  £555bn  £644bn  (£84bn)  86%
 FTSE 100 Companies  £628bn  £729bn  (£96bn)  86%
 All UK Private Sector Pension Schemes  £1,282bn  £1,551bn  (£261bn)  83%
 For comparison, the corresponding figures as at 30 November 2013 are as follows:
 At 31 March 2014  Assets  Liabilities  Surplus/ (deficit)  Funding Level
 FTSE 100 Companies  £510bn  £569bn  (£59bn)  90%
 FTSE 100 Companies  £577bn  £644bn  (£67bn)  89%
 All UK Private Sector Pension Schemes  £1,142bn  £1,304bn  (£162bn)  88%

Charles Cowling, Director, JLT Employee Benefits, comments:

“As the General Election campaign gets underway, the increase in the total deficit in UK private sector pension schemes of over £100billion in the last 12 months is a sober reminder of the burden that besets UK pension schemes. Low and even negative interest rates continue to give rise to ever bigger deficits and could prove particularly problematic for pension schemes with actuarial valuations in 2015 – demands from pension scheme trustees for more cash payments into DB pensions could escalate significantly in 2015. 

“There has been much radical overhaul of pensions legislation in the UK in the last few years, partly as politicians of all colours are all too aware of the importance of the grey vote. Indeed some of the most radical change in pension regulations in decades comes into force next week, with members of DC schemes able to cash out their pension funds in full. However, the new ‘freedom’ has not materialised in the same way for DB scheme members as their ability to access funds by transferring them into a DC scheme seems to be getting ever more bogged down in red tape. Likewise, DB schemes looking to transfer liabilities to individual members are facing the same headwind.  

“This is the result of the authorities getting increasingly worried about individuals making potentially inappropriate investment decisions for themselves, albeit there is considerable nervousness, with some justification, over the possibility of a big increase in pension scams as well.  “

So far there haven’t been any proposals or policies put forward by the political parties that look likely to alleviate the pressure on DB pension schemes. But maybe with 37 days to go until 7 May, there is still time?”

- 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. http://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