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

01 June 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 May 2018, JLT estimates the total DB pension scheme funding position as follows:

At 31 May 2018

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£675bn

£679bn

(£4bn)

99%

FTSE 350 Companies

£763bn

£772bn

(£9bn)

99%

All UK Private Sector Pension Schemes

£1,577bn

£1,620bn

(£43bn)

97%

For comparison, the corresponding figures as at 31 May 2017 are as follows:

At 31 May 2017

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£680bn

£718bn

(£38bn)

95%

FTSE 350 Companies

£769bn

£816bn

(£47bn)

94%

All UK Private Sector Pension Schemes

£1,560bn

£1,695bn

(£135bn)

92%

Charles Cowling, Director, JLT Employee Benefits, comments: “Markets continue to be positive for pension schemes and overall reported pension deficits are showing a strong improvement from twelve months ago. Indeed, the FTSE 100 is very close to showing an aggregate surplus in its pension schemes for the first time in a decade.

“However, crucial for pension schemes, is the outlook for interest rates. It had been thought likely that the Bank of England’s Monetary Policy Committee would raise interest rates at their meeting on May 10th but that did not materialise. Indeed, two factors suggest that the next rise in interest rates could be some months away yet. Firstly, there were positive signs on inflation with the latest figures revealing a headline rate of 2.2%, down from 2.3% last month. Secondly there has been a change announced to the Bank of England’s Monetary Policy Committee this month, with Professor Jonathan Haskel set to replace Ian McCafferty from September. Professor Haskel is an academic economist and productivity expert at Imperial College London. He is expected to bring insights and understanding on the UK economic outlook at a time when there are increasing signs of the economy stuttering with Brexit looming imminently. He replaces Mr McCafferty, who has consistently been one of the more hawkish members of the MPC, voting against the majority in favour of raising interest rates.

“The other interesting personnel change for pension schemes is the news that Lesley Titcomb is to stand down as head of the Pensions Regulator in February, at the end of her term of office. Given the recent Government White Paper on Protecting Defined Benefit Pension Schemes promising a tougher stance on pension funding and a vocal and critical Work and Pensions Select Committee, it is possible that this may signal politicians’ intent to ramp up their attention towards pensions.

“So this latest good news in markets may just be the calm before the storm. Perhaps this should trigger companies and pension schemes to take advantage of the current relative good times and seek opportunities to de-risk and settle liabilities whilst they can.”

- 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