JLT's monthly fund index update for the month of May 2016

01 June 2016

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 31 May 2016, JLT estimates the total DB pension scheme funding position as follows:

At 31 May 2016

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£552bn

£652bn

(£100bn)

85%

FTSE 350 Companies

£624bn

£738bn

(£114bn)

85%

All UK Private Sector Pension Schemes

£1,263bn

£1,573bn

(£310bn)

80%

For comparison, the corresponding figures as at 31 May 2015 are as follows:

At 31 May 2015

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£558bn

£638bn

(£80bn)

87%

FTSE 350 Companies

£631bn

£723bn

(£92bn)

87%

All UK Private Sector Pension Schemes

£1,283bn

£1,538bn

(£255bn)

83%

Charles Cowling, Director, JLT Employee Benefits, comments:  “Pension scheme deficits have reached record levels, with the total deficit for all UK private sector pension schemes exceeding the £300 billion mark for the first time in May. Conditions are getting ever more challenging for pension schemes with prolonged low interest rates and uncertainty in the markets ahead of the EU referendum.

“The Government is currently consulting on the possibility of allowing benefits to be reduced in extreme circumstances, but this is unlikely to help most hard-pressed companies which can’t seem to keep deficits from spiralling despite pumping ever more cash into schemes and taking action to reduce pension risks.    

“There isn’t too much prospect of imminent relief from markets either, as the nervousness surrounding the EU referendum is causing short-term volatility. With interest rates looking to stay low for some time yet, it seems unlikely that pension schemes will benefit from either an exit or a remain vote.

“Whilst companies should look to continue to seek opportunities to reduce risk and settle pension liabilities, they may wish to wait until after 23 June when there may be greater clarity on the shorter term outlook for markets.”  

 - ENDS -

Notes to Editor

Enquiries:

Smithfield Consultants:

Fay Israsena | T: +44 (0)20 7903 0633| E: fisrasena@smithfieldgroup.com

Raeesa Chowdhury | T: +44 (0)20 7903 0635| E: rchowdhury@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

contact Charles Cowling
Director charles_cowling@jltgroup.com 0161 242 5388