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Barnett Waddingham
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A turning point for FTSE350 pensions?

Published by Nick Griggs on

After a number of difficult years, let’s hope that 2017 is seen as the turning point for the defined benefit (DB) pension schemes of the UK’s largest public companies.

Although contributions to pay down DB scheme deficits are on the increase, companies appear to be in a healthier position to deal with this based on the increase in free cashflow over the period.

With equities performing strongly and bond yields having a quiet year, the funding position improved for many of the FTSE350 DB schemes. Overall, the aggregate IAS19 deficit for companies in the FTSE350 reduced from £62bn in 2016 to £55bn in 2017.

While this is all good news, it would not take much to tip the balance the other way. Our analysis suggests that a 0.5% fall in bond yields in 2017 would have pushed the aggregate deficit of the FTSE350 DB schemes up to £85bn.

Key findings

£14bn

value of transfer payments to DC schemes

10%

average deficit contributions paid as a proportion of dividends

70%

proportion of total pension cost relating to DB schemes


Download the full report below.

FTSE350 report - impact of pension schemes on UK business

About the author

  • Nick Griggs

    Nick advises a range of UK businesses on DB pension issues including risk reduction exercises, scheme funding, pension benefit design and accounting disclosures. He also acts as Scheme Actuary to a number of clients.

    View Biography

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