FTSE 350 defined benefit pension deficit falls to £133bn

The accounting deficit of defined benefit (DB) pension schemes for the UK’s largest 350 organisations fell from £137 billion at the end of February 2017 to £133 billion on 31 March 2017, according to research by Mercer.

Its Pensions risk survey, which is based on projections and analysis of FTSE 350 organisations’ financial statements adjusted from their financial year end, also found that asset values increased by £4 billion, rising from £735 billion at the end of February 2017 to £739 billion at the end of March 2017.

Liability values remained the same at £872 billion between February 2017 and March 2017.

Le Roy van Zyl (pictured), partner at Mercer, said: “The triggering of Article 50 in the end had very little impact on pension scheme deficits, given that markets had already anticipated events. The key drivers are now how the Brexit discussions proceed, and how the UK and world economy progresses.

“Pension deficits will be sensitive to emerging conditions, and unexpected developments can lead to significant volatility. To some extent it will be surprising if there are not material surprises in the months and years to come. Scheme trustees and sponsors must therefore be ready and able to weather any storms and take advantage of any opportunities. This requires some urgency to be applied to establishing an integrated and joined up strategic and operational plan.”