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
  • Jobs
  • IFoA
    • CEO Comment
    • IFoA News
    • People & Social News
    • President Comment
  • Archive

Topics

  • Data Science
  • Investment
  • Risk & ERM
  • Pensions
  • Environment
  • Soft skills
  • General Insurance
  • Regulation Standards
  • Health care
  • Technology
  • Reinsurance
  • Global
  • Life insurance
Quick links:
  • Home
  • The Actuary Issues
  • October 2014
10

FTSE350 defined benefit deficits 'up 50%' in early October

Open-access content 27th October 2014

The defined benefit pension deficits of the UK’s largest companies jumped by 50% to £96bn in the first two weeks of October, consultants Hymans Robertson have found.

Collective defined benefit pension deficits for FTSE350 businesses grew from £63bn on September 30 to £96bn on October 15, because of equity market falls and a drop in gilt yields, the firm said.  

 'This is taking us back to funding levels seen in the summer of last year. A typical scheme will have seen their funding level drop by around 5 and 10% since the beginning of September,' said Jon Hatchett, head of corporate consulting at Hymans Robertson.

'The collective FTSE350, despite paying in cash contributions of around £15bn last year, has ended up in a worse position that it was 12 months ago.'

The firm said market volatility highlighted the need for companies to continually look for ways to de-risk their pension schemes to reduce the possibility of paying out more cash in the future. 

It noted that equity markets had a difficult September and early October with the FTSE100 index down from a high 6900 to around 6200 in the last few days, due to a decline in gilt yields, global economic slowdown, the Ebola outbreak and political instability.

Hatchett said: 'The short-term outlook remains unclear and, in these instances, markets often overshoot.  We would not recommend knee-jerk reactions to short-term market moves. 

'Pension scheme funding is a long-term process and the recent falls will not necessarily have knocked the scheme off the long-term track. However, the greatest concern will likely be for companies who have schemes nearing a valuation.

'In environments such as this, daily online monitoring of scheme funding and forward-looking risk analytics are essential tools for managing schemes.'

This article appeared in our October 2014 issue of The Actuary.
Click here to view this issue
Filed in:
10
Topics:
Pensions
Share
  • Twitter
  • Facebook
  • Linked in
  • Mail
  • Print

Latest Jobs

Capital contractor

England, London
£700 - £1000 per day
Reference
118813

Senior Financial Risk Actuary

London, England
£55000 - £100000 per annum
Reference
118812

Pricing Technology Lead

England, London
£60000 - £70000 per annum
Reference
118811
See all jobs »
 
 

Most-Popular

 
 
 

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
​
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

© 2020 The Actuary. The Actuary is published on behalf of the Institute and Faculty of Actuaries by Redactive Publishing Limited, Level 5, 78 Chamber Street, London, E1 8BL. Tel: 020 7880 6200