DB pension scheme deficits improve

The total deficit of UK private sector defined benefit (DB) pension schemes has fallen to £117 billion, according to research by JLT Employee Benefits (JLT EB).

The organisation’s monthly index showing the funding position of all UK private sector DB pension schemes under the standard accounting measure (IAS19 / FRS17), found that the total deficitis down from £160 billion in August 2012.  

The research also found that:

  • FTSE 100 organisations have a total DB pension scheme deficit of £57 billion, the same as in August 2012.
  • FTSE 350 organisations have a total DB pension scheme deficit of £61 billion, down from £66 billion in August 2012.

Charles Cowling (pictured), director of JLT Employee Benefits, said: “Pension scheme deficits have reduced over the course of the year following excellent returns on growth assets and the impact of increases in corporate bond yields.

“Following this improvement many schemes are reconsidering whether it is the right time to secure liabilities with an insurer.

“However, just as demand for bulk annuities is likely to start increasing, we are seeing participants in the market considering whether to withdraw, provoked by increased regulatory and capital requirements.”