Skip to main content
The Actuary: The magazine of the Institute and Faculty of Actuaries - return to the homepage Logo of The Actuary website
  • Search
  • Visit The Actuary Magazine on Facebook
  • Visit The Actuary Magazine on LinkedIn
  • Visit @TheActuaryMag on Twitter
Visit the website of the Institute and Faculty of Actuaries Logo of the Institute and Faculty of Actuaries

Main navigation

  • News
  • Features
    • General Features
    • Interviews
    • Students
    • Opinion
  • Topics
  • Knowledge
    • Business Skills
    • Careers
    • Events
    • Predictions by The Actuary
    • Whitepapers
    • Moody's - Climate Risk Insurers series
    • Webinars
    • Podcasts
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive
Quick links:
  • Home
  • The Actuary Issues
  • November 2012
11

UK defined benefit pension schemes' deficit falls to £102bn

Open-access content Thursday 1st November 2012 — updated 5.13pm, Wednesday 29th April 2020

The combined deficit of the UK’s defined benefit pension schemes fell to £102bn last month, but schemes remain at the whim of changes in the volatile equity markets, JLT Pension Capital Strategies said today.

2

According to the consultancy's latest monthly index of the funding position of UK private sector DB schemes, their combined deficit fell from £120bn at the end of September. This was mirrored by a fall in the combined deficit of the FTSE 350 companies' schemes - down from £47bn at the end of September to £38bn, and the FTSE 100 - down from £40bn to £33bn.

JLT noted, however, that compared to the end of October 2011, the combined deficit of the UK's DB schemes had increased from £82bn. An increase in the value of their combined assets from £981bn to £1,063bn over the past 12 months was more than cancelled out by an increase in liabilities from £1,063bn to £1,165bn.

Charles Cowling, JLT managing director, explained that schemes appeared stable because of a brief boost in asset values and the impact of injections of money being made by companies in a bid to close their scheme funding gaps.

'However, merely in order to stay afloat, UK DB schemes require regular cash injections,' he said. 'They are still billions of pounds away from being fully funded and remain at the whim of the equity markets and, consequently, at the mercy of macro-economic turbulence.

Market uncertainty around the US election and the impact that the revised accounting standard IAS 19 might have on companies' Profit & Loss statements, which set out their income, meant firms should make 'every effort' to increase their scheme funding levels, he noted.

Cowling added that, as schemes continued to reduce their exposure to risky assets, they would increasingly rely on bonds. 'Deficits still represent a material risk to many companies and market stability cannot be relied upon forever,' he said. 'The increase in liabilities, albeit small, should serve as a warning to corporates and trustees alike that more needs to be done to address this issue.'

This article appeared in our November 2012 issue of The Actuary.
Click here to view this issue
Filed in
11
Topics
Pensions

You might also like...

Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Catastrophe Modelling Analyst - London Market Broker

London, England
£40000 - £50000 per annum
Reference
145925

Senior Catastrophe Analyst

England, London
£65000 - £75000 per annum
Reference
145924

Life Actuary - Financial Reporting - Day Rate contract

Negotiable
Reference
145923
See all jobs »
 
 

Today's top reads

 
 

Sign up to our newsletter

News, jobs and updates

Sign up

Subscribe to The Actuary

Receive the print edition straight to your door

Subscribe
Spread-iPad-slantB-june.png

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
​
FOLLOW US
The Actuary on LinkedIn
@TheActuaryMag on Twitter
Facebook: The Actuary Magazine
CONTACT US
The Actuary
Tel: (+44) 020 7880 6200
​

IFoA

About IFoA
Become an actuary
IFoA Events
About membership

Information

Privacy Policy
Terms & Conditions
Cookie Policy
Think Green

Get in touch

Contact us
Advertise with us
Subscribe to The Actuary Magazine
Contribute

The Actuary Jobs

Actuarial job search
Pensions jobs
General insurance jobs
Solvency II jobs

© 2023 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited. All rights reserved. Reproduction of any part is not allowed without written permission.

Redactive Media Group Ltd, 71-75 Shelton Street, London WC2H 9JQ