UK DB deficit shows modest improvement over 2018

However, the IAS19 funding position remains unchanged at 93 per cent.

FTSE 100 companies have seen a fall in their pension deficit to £20bn from £33bn over the same period.

By contrast, as Brexit uncertainties have intensified, in the shorter time frame of one month over December, the deficit of all UK private sector DB schemes rose sharply from £48bn to £107bn.

In fact, in November FTSE 100 schemes tipped into accounting surplus for the first time in a decade. However, accounting deficits do not reflect the contributions needed to the scheme or the cost of insuring benefits, leading to some criticism of the measure.

Charles Cowling, chief actuary at JLT, said: “2018 was a turbulent year for pension schemes but it was not all negative. Markets were initially strong in the face of considerable political uncertainty and signs emerged that interest rates are at last on the way up. That said, there is no sign yet of an unwinding of the Bank of England’s position on quantitative easing.”

“Additionally, the latest mortality analysis increasingly points to a sustained slowing down in the rate of improving life expectancy. All of this is good news for pension scheme deficits," he added. “We believe that 2019 will be another bumper year for insurance company buy-outs, possibly enhanced by the emergence of other superfund consolidators, who are looking at different and cheaper routes for companies to offload their pension liabilities.”

The figures in full

As at December 31 2018, JLT estimated the total DB pension scheme funding position as follows:

For comparison, the corresponding figures as at December 31 2017 are:

 As at November 30 2018, JLT estimated the total DB pension scheme funding position as follows: