The key financial assumptions required for determining pension liabilities under the Accounting Standards FRS102 (UK non-listed), IAS19 (EU listed) and FAS158 (US listed) are the discount rate and the rate of future inflation.

These newsletters highlight the areas that should be considered when setting the actuarial assumptions.

Impact on UK Companies

Our 2015 survey of FTSE350 companies with Defined Benefit Schemes provides useful insights into the impact DB schemes have on UK companies. Key findings include:

  • Over the next 60 years or so the total paid is expected to exceed £1.4 trillion
  • The aggregate deficit for FTS£350 schemes fell from £64 billion to £50 billion
  • On an aggregate level, deficit contributions equate to around 34 pence for every £1 spent on pension provision by companies in our survey
  • In 2015, nearly £8 billion was paid by FTSE350 companies to reduce Defined Benefit deficits

These and previous year's survey results can allow businesses with DB schemes to benchmark themselves against their peers.

Our annual survey of the key actuarial assumptions used by FTSE100 companies with a reporting date of 31 December can be a useful reference point for companies setting their own assumptions.

"61 FTSE350 companies increased payouts to shareholders and at the same time reduced deficit contributions. On the other hand, 51 FTSE350 companies adopted a seemingly more balanced approach and increased or at least maintained both shareholder payouts and contributions."