Big Schemes Survey 2016: £1bn+

Published by Andrew Vaughan on

The private sector’s big schemes are the industry’s trend-setters.

Many well-established pension innovations have originated at the larger end of the industry, but have worked their way down to the smaller schemes as they become more refined and accessible.

"67% of schemes have a deficit on their company accounting basis, which is lower than last year, when 75% of schemes were in deficit."

Our fourth annual survey in relation to private sector DB schemes in the UK with assets of over £1bn covers 160 schemes and focuses on scheme type, asset allocation, investment performance, deficit contributions, and adviser fees.

Some of the highlights from our analysis include:

  • 64% of final salary schemes in our survey are closed to new members and a further 33% are also closed to future accrual, leaving just 3% open to new members. The Pensions Regulator’s and Pension Protection Fund’s 2015 Purple Book, covering all PPF-eligible DB schemes, shows 13% of schemes remain open to new members
  • 67% of schemes have a deficit on their company accounting basis, which is lower than last year, when 75% of schemes were in deficit
  • excluding one significant outlier, the average annual employer deficit contribution was around £97 million
  • a significant proportion (23%) of assets have been classed as 'other' i.e. hedge funds and derivatives, or funds where the allocation between equities, gilts, property, etc. could not easily be determined
  • the average three-year investment return was around 10.4% per year (for end dates ranging between 31 March 2014 and 31 March 2015), and the five-year return was around 10.2% per year. The one-year return over this period was higher, at around 14.4%
  • the average PPF levy paid was £2.75 million
  • the average annual investment management fee was around 0.2% of assets, which is unchanged from last year

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Big Schemes Survey 2016: £1bn+