DEFINED BENEFIT

U.K. pension deficits stable in January but more than double over past 12 months

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The total deficit of FTSE 350 company pension funds increased 2.2% in January to £140 billion ($175.5 billion), show data from consultant Mercer's pensions risk survey.

Deficits increased 112.1% compared with figures as of Jan. 29, 2016.

The funded level was 83.6% as of Jan. 31, according to calculations using Mercer's data. That compares to 84% as of Dec. 31 and 90.7% as of Jan. 29, 2016.

“There are real concerns as we move forward into 2017, particularly around inflation, and trustees and sponsors should take every opportunity to understand their risk exposure and seek to manage it in line with their objectives and in line with the level of risk that the sponsor can support,” said Alan Baker, U.K. DB risk leader for Mercer, in a statement accompanying the data.

Mercer's data relate to about 50% of all U.K. pension liabilities.

Separate data by JLT Employee Benefits show FTSE 350 company pension fund deficits grew 125% over the year ended Jan. 31 to £108 billion. The funded status was 87% at the end of the month, down from 93% as of Jan. 31, 2016.

JLT said the total deficit of all U.K. corporate pension funds increased 87.9% to £263 billion for the year ended Jan. 31.

The consultant revised its data for January 2016 following constituent changes of the FTSE 100 index and other factors, including a downward revision of JLT's best estimate longevity assumptions, which had a positive impact on figures, said Charles Cowling, director at the firm. An update of December 2016 figures were not available by press time.

The funded status of all corporate pension funds was 85% as of Jan. 31, compared to 90% as of Jan. 31, 2016.

The 100 largest companies in the U.K. saw their deficits more than double over the year, up 130% to £92 billion. The funded status of these pension funds was 87% at the end of the month, compared to 93% as of Jan. 31, 2016.