The FINANCIAL -- Mercer’s Pensions Risk Survey data shows that the accounting deficit of defined benefit (DB) pension schemes for the UK’s 350 largest listed companies decreased from £72bn at the start of 2018 to £32bn on 31 July.
At 31 July, the quoted deficit increased to £32bn (compared to £29bn at the end of June) and funding level remained the same at 96%. Liability values have increased from £818bn to £826bn due to an increase in market implied inflation. Asset values increased from £789bn to £794bn, offsetting the increase in liabilities.
Pension deficit improved by a total of £40bn from £72bn at the start of the year to £32bn
July saw both asset values and liabilities rise and the deficit increased by £3bn compared to the end of June
2018 expected to be a record year for pension risk transfer due to improving funding levels, attractive pricing in the market and uncertainty over Brexit driving risk reduction
Mercer’s data relates to about 50% of all UK pension scheme liabilities and analyses pension deficits calculated using the approach companies have to adopt for their corporate accounts. The data underlying the survey is refreshed as companies report their year-end accounts. Other measures are also relevant for trustees and employers considering their risk exposure. But data published by the Pensions Regulator and elsewhere tells a similar story.