FTSE 350 defined benefit pension deficit falls by £7bn

Pension-saving-iStock-2015

There was a £7 billion reduction in the accounting deficit of defined benefit (DB) pension schemes for the UK’s 350 largest listed organisations in September 2015, according to research by Mercer.

Its Pensions risk survey, which is based on projections from reported financial statements and year-end accounts, found that the accounting deficit for the FTSE 350 fell from £85 billion at the end of August 2015 to £78 billion on 30 September 2015.

Asset values fell by £2 billion from £626 billion on 31 August to £624 billion at the end of September. Liability values declined by £9 billion to £702 billion.

Ali Tayyebi, senior partner in Mercer’s retirement business, said: “It might come as some relief that accounting deficits have improved further during September despite the continued fall in in equity markets.

“However, recent events have highlighted the large number of complex interlinked global and UK specific variables which will continue to drive the health of UK pension schemes going forward.

“The Continuous Mortality Investigation has also just published its latest annual update of mortality trends, which, this time, suggests a small reduction in projected life expectancy. This is another area which sponsors and trustees must keep under review going forward and sponsors will particularly want to make sure this is considered for their next year-end disclosure.”