The FTSE 350 and Their Pensions Disclosures

29 November 2016

This Annual Report from JLT Employee Benefits covers all FTSE350 companies. It includes analysis of all annual reports for years ending on or before the 31 March 2016 and published by 30 June 2016.


  • The total deficit in FTSE 350 pension schemes at 31 March 2016 is estimated to be £101 billion.
  • Over the last 3 years, FTSE 350 pension schemes have gone from a total deficit of £86 billion to an overall deficit of £101 billion despite FTSE 350 companies paying £24 billion of deficit funding into their pension schemes. Four FTSE 350 companies (BT, Royal Bank of Scotland, BAE Systems and International Airlines Group) have each paid more than £1 billion of deficit funding into their pension schemes over the last three years.
  • The average pension scheme asset allocation to bonds has increased from 50% to 60% in the last five years, and the pace at which companies and trustees are switching pension assets out of equities into bonds would appear to be increasing again after three years of little change. Over the past three years, 12 FTSE 350 companies have switched more than a quarter of their assets from equities into bonds.
  • The total disclosed pension liabilities of the FTSE 350 companies have increased to £666 billion in 2016 from £540 billion in 2012. Sixteen companies have disclosed pension liabilities of more than £10 billion, whilst 130 FTSE 350 companies have no defined benefit pension scheme at all.
  • If pension liabilities were to be measured on a risk-free basis rather than using a AA bond discount rate, we estimate that it would increase the total disclosed pension liabilities of the FTSE 350 from £666 billion to around £800 billion and the total deficit at 31 March 2016 would be around £185 billion.
  • Twenty-seven FTSE 350 companies have disclosed pension liabilities greater than the total equity value of the company, and five FTSE 350 companies now have disclosed pension liabilities valued at over double the company equity value.
  • Companies are reacting to the combination of difficult economic conditions, rising pension costs and increasingly aggressive pension regulations by closing pension schemes to future and even current employees. Already, more than a third of all FTSE 350 companies do not have a DB pension scheme. Only 98 FTSE 350 companies are still providing more than a handful of current employees with DB benefits (i.e. ignoring companies who are incurring ongoing DB service costs of less than 1% of total payroll). Of these, only 35 companies (i.e. just 10% of the FTSE 350) are still providing DB benefits to a significant number of employees (defined as incurring ongoing DB service cost of more than 5% of total payroll).

Download the full report here.

Report authors:

Charles Cowling, Managing Director | T: +44 (0) 161 242 5388 | E:

Murray Wright, Consultant | T: +44 (0) 131 456 6868 | E:

contact Charles Cowling
Director 0161 242 5388
contact Murray Wright