DB pensions deficit down £53bn in a month

Deficits in UK private defined benefit (DB) pension schemes fell to £78bn at the end of April, down by £53bn in the last month according to data from JLT Employee Benefits reported by the Financial Adviser.

The total shortfall of DB schemes stood at £131bn at the end of March, but by the end of April 2017 it reached £146bn. Total assets of the pension funds are now £1.5tn compared to liabilities of £1.6tn.

The total deficit registered by FTSE 100 companies has fallen to £15bn from £18bn compared to the previous month. FTSE 300 companies saw their deficit fall from £43bn to £22bn.

Charles Cowling, director of JLT Employee Benefits, said that markets are positive for pension schemes and “overall reported pension deficits are showing a strong improvement from 12 months ago.”

Cowling added: “Indeed, the FTSE 100 is close to showing an aggregate surplus in its pension schemes for the first time in almost a decade. This is despite the recent poor GDP figures suggesting the UK economy is on the brink of stagflation.”

Cowling said the outlook for interest rates is all-important for pensions schemes: “It had been thought quite likely that the Bank of England’s monetary policy committee would raise interest rate plans, which would be of significant interest to pension schemes as they seek to plan and navigate their de-risking paths.”