JLT's monthly fund index update for the month of February 2017

01 March 2017

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 28 February 2017, JLT estimates the total DB pension scheme funding position as follows:

At 28 February 2017

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£657bn

£751bn

(£94bn)

87%

FTSE 350 Companies

£745bn

£856bn

(£111bn)

87%

All UK Private Sector Pension Schemes

£1,570bn

£1,840bn

(£270bn)

85%

For comparison, the corresponding figures as at 29 February 2016 are as follows:

At 29 February 2016

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£557bn

£583bn

(£26bn)

96%

FTSE 350 Companies

£637bn

£668bn

(£31bn)

95%

All UK Private Sector Pension Schemes

£1,317bn

£1,426bn

(£109bn)

92%

Charles Cowling, Director, JLT Employee Benefits, comments: 

“February has been a quiet month for markets which continue to show resilience amidst global political turmoil. Pension deficits are broadly unchanged over the month but are still at challenging levels for many companies compared to those 12 months ago.

“Whilst accepting that the system may not be perfect, the Government, in its recently published Green Paper on ‘Security and Sustainability in Defined Benefit Pension Schemes’, does not seem to believe there is a significant structural problem with the funding and regulation of DB schemes. Their view is that deficits will shrink for most schemes if employers continue to pay into them and that the evidence does not support the perspective that promised pensions are unaffordable for most employers. Indeed, any appetite for change seems to be focused around giving new powers to The Pensions Regulator (TPR) in relation to corporate transactions.

“This Green Paper will cause dismay for many companies where pension obligations are causing real distress and potentially threatening their very existence, as well as the livelihoods of their employees and pension scheme members.

“DB pension schemes do not operate in a vacuum. For many, their ability to deliver promised benefits if the employer gets into difficulty, is questionable. Furthermore, for those employers with large DB pension schemes, the economic cost of guaranteeing escalating pension liabilities at a time of extraordinary market conditions, is becoming a burden that their balance sheets are increasingly less able to bear.

“We hope that this Green Paper is not a signal that the Government intends to ‘kick the can down the road’ on DB pensions for another 20 (or even 50) years – there is too much at stake. Now more than ever all stakeholders, including employers, trustees, members, policy makers and the pensions industry, need to act together and explore the options for achieving a lasting DB settlement.”

- ENDS -

In a recently published whitepaper, JLT Employee Benefits has offered a number of recommendations to achieve what we believe would help to address those DB pension sustainability issues. If you’d like to request our whitepaper – please find a link here (JLT: How do we get out of this Pensions Black Hole?)

Notes to Editor

Enquiries:

JLT Employee Benefits

Corinne Gladstone, PR Manager| T: +44 (0)20 7895 7705| E: corinne_gladstone@jltgroup.com

Smithfield Consultants:

Julia Cooke | T: +44 (0)20 7903 0631| E: jcooke@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 41 territories with some 10,600 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