French companies with UK DB schemes

The funding levels of UK defined benefit (DB) schemes linked to French parent companies are very similar to those of the FTSE350, but their deficit contributions per employee are almost twice as high.  This is one of the comparisons drawn out of our research into the DB schemes of UK subsidiary companies with French parents.

Our report, which is based on data from the accounts of 16 UK subsidiaries of French companies, analyses the contributions paid, levels of deficit and levels of risk within the schemes.

One assessment of risk used is the exposure to equity investments through the scheme relative to the French parent’s shareholding in the UK subsidiary company.  In five cases, the French parent companies are actually more exposed to the schemes’ equity investments than to the performance of their own subsidiary companies, despite these schemes allocating less than 50% of their total funds to equities.

For around half the companies the actuarial movements on assets and liabilities were between 0% and 10% of shareholder funds over the year being analysed.  In three cases this figure stood at over 40%.  For all companies surveyed, movements on actuarial liabilities were more significant than on actuarial assets.

Please click on the following link to view the full report.