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
  • August 2015
08

FTSE 350 pension deficit goes up by 17% in July

Open-access content Thursday 6th August 2015 — updated 5.13pm, Wednesday 29th April 2020

Defined benefit pension scheme deficit for UK’s FTSE 350 companies rose by 17% in the past month, due to low bond yields.

2

Health, retirement and investment consultancy Mercer said the total deficit increased from £81bn at the end of June to £95bn on 31 July.

The firm said the increase was driven by a fall in corporate bond yields leading to lower returns, although this was slightly offset by a fall in expected inflation and a rise in asset returns.

Data from Mercer's latest Pensions Risk Survey showed assets were valued at £633bn on 31 July, representing a £9bn increase from £624bn at the end of June. Liability values were £728bn at their highest in July. Mercer said it was a rise of £23bn from 30 June where it stood at £705bn. 

Ali Tayyebi, senior partner at Mercer's retirement business, said FTSE 100 companies returns over July might have given hope that funding would improve.

"The FTSE100 returned around 2.5% over July, recovering a lot of the ground lost in the last week of June. This might have given hope for a continued improvement in the funding position over the month of July," he said.

"However a relatively small reduction in yields available on long dated corporate bonds has meant that the deficit has in fact increased quite substantially over the month. It is particularly concerning that deficits have now edged very close to the last monthly high, as seen at the end of January 2015, despite corporate bond yields being nearly 65 basis points higher than they were at that time."

Le Roy van Zyl, principal in Mercer's financial strategy group, said: "It appears the end-June improved deficit position was a short-lived bounce, with volatility continuing in July and pension scheme deficits increasing significantly over the month. 

"Despite the threat of a potential Grexit, the ongoing market issues really relate to the unfolding economic situation in China, and the timing of the US monetary tightening. For pension schemes, being prepared for both optimistic and pessimistic market scenarios remains key."

This article appeared in our August 2015 issue of The Actuary.
Click here to view this issue
Filed in
08
Topics
Pensions

You might also like...

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

Latest Jobs

New Fast-Growing Team - Actuarial Systems Development

London (Greater)
Excellent Salary Package
Reference
143762

Actuarial Pension Consultant – Scotland/Remote – Up to £90,000 plus bonus

Edinburgh / Glasgow / Remote working
Up to £90,000 + Bonus
Reference
143761

Part Qualified Pensions Actuary– Specialised Pensions Consultancy - Scotland/Remote - Up to £70,000

Edinburgh / Glasgow / Remote working
Up to £70,000 + Bonus
Reference
143760
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