The total deficit of all U.K. corporate pension funds grew 24.8% in March, but fell 2.2% over the year ended March 31 to £131 billion ($183.8 billion), show data by JLT Employee Benefits.
The consultant said in its monthly update that the funding level of these defined benefit funds worsened to 92% at the end of March, from 94% as of Feb. 28. The funding level was unchanged vs. figures at March 31, 2017.
A 0.3% fall in assets to £1.52 trillion over the month was more than offset by a 1.4% rise in liabilities, to £1.65 trillion. For the year ended March 31, assets and liabilities both fell 1.4%.
FTSE 100 companies saw their deficits increase 37.5% to £33 billion in March, but fell 5.7% year-on-year. The funding level was steady over the year at 95%, but worsened from Feb. 28, at 97%.
FTSE 350 firms also saw their deficits rise in March to a total £43 billion, increasing 34.4%. The funded level was 95% as of March 31, vs. 96% as of Feb. 28. For the year ended March 31, deficits fell 2.3%, and the funding level was flat at 95%.
"Despite some significant increases in volatility, markets continue to be reasonably benign for pension schemes and overall reported pension deficits are largely unchanged from 12 months ago," said Charles Cowling, director, JLT Employee Benefits in a statement accompanying the data. "However, this positive picture still masks ongoing challenges for a number of companies with large pension schemes.
"One of the key problems for many companies is that the pension deficit calculated by scheme trustees, which determines the cash funding required to be paid by the employer, is significantly greater than the pension deficit reported in the employer's accounts," he added.