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

02 July 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 June 2018, JLT estimates the total DB pension scheme funding position as follows:

At 30 June 2018

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£673bn

£674bn

(£1bn)

100%

FTSE 350 Companies

£761bn

£766bn

(£5bn)

99%

All UK Private Sector Pension Schemes

£1,573bn

£1,607bn

(£34bn)

98%

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

At 30 June 2017

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£671bn

£708bn

(£37bn)

95%

FTSE 350 Companies

£758bn

£804bn

(£46bn)

94%

All UK Private Sector Pension Schemes

£1,527bn

£1,665bn

(£138bn)

92%

Murray Wright, Deputy Chief Actuary, JLT Employee Benefits, comments: “Half year results are strong for pension schemes when compared to the position twelve months ago and also against 31 December 2017. Rises in corporate bond yields, alongside solid equity market returns have contributed to lower reported deficits.

“FTSE 100 companies are very close to showing an aggregate surplus for the first time in a decade. This milestone highlights the striking point that these schemes are now in a position where they need to earn a return of less than 3% p.a. on their assets over the long run to allow them to pay benefits as they fall due to members. A return of less than 3% p.a. over the long run would generally be regarded as an achievable target for most schemes, even those running a low risk investment strategy.

“Pension schemes that are ahead of schedule on their funding plans should actively seek to minimise their reliance on the sponsor through an integrated funding and investment strategy linked to expected scheme cash flows and at the same time de-risk their liabilities. A bull market that is almost 10 years old can’t be relied upon to keep delivering results.”

- 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 Murray Wright
Principal murray_wright@jltgroup.com