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

04 October 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 September 2018, JLT estimates the total DB pension scheme funding position as follows:

At 30 September 2018

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£668bn

£670bn

(£2bn)

100%

FTSE 350 Companies

£756bn

£763bn

(£7bn)

99%

All UK Private Sector Pension Schemes

£1,565bn

£1,602bn

(£37bn)

98%

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

At 30 September 2017

Assets

Liabilities

Surplus / (Deficit)

Funding Level

FTSE 100 Companies

£669bn

£699bn

(£30bn)

96%

FTSE 350 Companies

£756bn

£794bn

(£38bn)

95%

All UK Private Sector Pension Schemes

£1,528bn

£1,645bn

(£117bn)

93%

Charles Cowling, Chief Actuary, JLT Employee Benefits, comments: “This has been a quiet month in markets with both the inflation outlook and long-term interest rates drifting slightly upwards. At the same time equity markets have held up well, despite continuing political uncertainty in Europe and the US. All of this means that pension scheme deficit positions are broadly unchanged, showing a modest improvement over the last 12 months.

“Perhaps the news that will be of most interest to finance directors and shareholders is the recent announcement from the Office of National Statistics that life expectancy in the UK has stopped improving for the first time since their figures began in 1982. Companies are also going to be looking at making changes to their life expectancy assumptions, given that current indications also show that 2018 is going to be another relatively heavy year for mortality.

“After decades of continuing improvements in life expectancy resulting in ever increasing pension liabilities – this slowdown in longevity improvements has the potential to knock billions off pension liabilities. We estimate that 2018 could see pension liabilities reduce by over £40billion on account of the changing outlook for life expectancy, sending pension schemes soaring into surplus – at least as far as the numbers recorded in company accounts are concerned.”

- 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

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