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

02 January 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 31 January 2018, JLT estimates the total DB pension scheme funding position as follows:

At 31 January 2018

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£678bn

£713bn

(£35bn)

95%

FTSE 350 Companies

£765bn

£809bn

(£44bn)

95%

All UK Private Sector Pension Schemes

£1,555bn

£1,679bn

(£124bn)

93%

For comparison, the corresponding figures as at 31 January 2018 are as follows:

At 31 January 2017

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£656bn

£709bn

(£53bn)

93%

FTSE 350 Companies

£741bn

£805bn

(£64bn)

92%

All UK Private Sector Pension Schemes

£1,529bn

£1,713bn

(£184bn)

89%

Charles Cowling, Director, JLT Employee Benefits, comments:

“Markets have seemingly been reasonably benign for pension schemes this month, as overall reported pension deficits continue to drift downwards. However, this masks frantic activity within a few companies with large pension schemes. For many companies the pension deficit calculated by the pension scheme trustees and used for calculating the cash funding required to be paid by the employer, is significantly greater than the pension deficit reported in the employer’s accounts.

“Moreover, actuarial valuations being carried out currently are likely to show a need for significant increases in cash funding. This comes at a time when the tension between funding pension deficits and paying dividends to shareholders has spilled over in recent weeks, with the positions at Carillion and Capita grabbing headlines and column inches.

“The harsh lesson for shareholders may be that there are many companies with large pension schemes which are now going to come under increased pressure to prioritise the financing of pension deficits over returns to shareholders. This can only mean that we are likely to see more companies following the Capita example with share prices suffering as a result.” 

- ENDS -

In a whitepaper published last year year, 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:

Emily Cullen | T: +44 (0)20 3047 2530| E: ecullen@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 2015 had revenues of £167.4m 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 141 countries.

www.jlt.com


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