JLT's monthly fund index update for the month of December 2018

04 October 2018

1 December 2018: 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 November 2018, JLT estimates the total DB pension scheme funding position as follows:

At 30 November 2018

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£647bn

£648bn

(£1bn)

100%

FTSE 350 Companies

£731bn

£737bn

(£6bn)

99%

All UK Private Sector Pension Schemes

£1,514bn

£1,562bn

(£48bn)

97%

For comparison, the corresponding figures as at 30 November 2017 are as follows:

At 30 November 2017

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£674bn

£696bn

(£22bn)

97%

FTSE 350 Companies

£762bn

£791bn

(£29bn)

96%

All UK Private Sector Pension Schemes

£1,541bn

£1,639bn

(£98bn)

94%

Charles Cowling, Chief Actuary, JLT Employee Benefits, comments: “The Lloyds Banking Group case on GMP equalisation continues to keep the pensions industry awake at night. The industry is slowly coming to terms with the scale of the task ahead and the efforts necessary to resolve the sex discrimination caused by GMPs. Pension schemes are going to have to recalculate benefits for millions of members, demanding fiendishly complicated calculations that will incur huge additional costs and resources. Moreover, ongoing administration costs for pension schemes are likely to increase significantly as a result.

“Of course, this blow has come at a time when UK pension schemes and indeed, the wider economy, are facing a looming front of uncertainty as the Brexit deadline draws ever nearer. At this stage it is impossible to know what impact Brexit will have – over either the short or longer term – but that very risk, and accompanying market uncertainty and volatility, is all the more reason for trustees and companies to be looking to take pension risks off the table.

“The potential good news in all this, is that we may have an opportunity to simplify pension scheme benefits, using conversion legislation recently introduced. We will very soon be in a position to calculate the increase in total value required to each pension scheme member’s benefit. If this is done at the same time as benefits are automatically converted into a much simplified form (including the abolition of all GMPs) then not only will individual pension scheme members get a more straightforward benefit but this simplicity will ultimately flow through to lower costs for companies.”               

- ENDS -

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 3047 2529 | E: jcooke@smithfieldgroup.com

Notes to Editor

Statistics in the headline and quote: 

JLT’s headline estimates are based on data generated through JLT’s previous buyout transactions requiring GMP equalisation. 

About JLT Employee Benefits

Jardine Lloyd Thompson is one of the world’s leading providers of insurance, reinsurance 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 countries with more than 10,600 employees. Supported by the JLT International Network, it offers risk management and employee benefit solutions in 135 countries.

For further information about JLT, please visit our website www.jlt.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.

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.jlteb.com

contact Murray Wright
Principal murray_wright@jltgroup.com