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The Actuary The magazine of the Institute & Faculty of Actuaries

Rollercoaster month for FTSE350 pension deficits

Data from the Aon Hewitt 350 Index showed that the collective final salary pensions accounting deficit of the UK’s FTSE 350 companies stood at £38bn on 27 July, which was down from the figure of £44bn at the end of June.

However, on the back of increased investor confidence, at the beginning of July there was a significant improvement of over £17bn, leaving the deficit level at £27bn on 7 July. Yet on 18 July, the combined deficit stood at £45 billion following an £18bn reversal as investors sought safety.

Marcus Hurd, principal and actuary. Aon Hewitt, said: “Schemes can use these swings, whether caused by changes in asset or liability values, to de-risk. They can lock in the improvements to funding levels through reductions in allocations to higher risk assets and greater hedging.”