Mercer: FTSE 350 pension deficit increased by 28% in turbulent 2018

8 January 2019

Mercer publishes on its website:

“Mercer has today published its 2018 Pensions Risk Survey which shows that the deficit of defined benefit (DB) pension schemes for the UK’s 350 largest listed companies increased from £32bn at the end of 2017 to £41bn at the end of 2018; a 28% increase in the deficit. Overall, the quoted funding level decreased by 1% to 95% for the full year.

The rise in deficit was driven by a £19bn fall in asset values from £766bn to £747bn, while liabilities remained broadly flat, reducing by just £10bn from £798bn to £788bn, from 2017 to the end of 2018.

However, the movements mask a volatile year, in which pension schemes were in surplus for five months from May to September. December alone saw the deficit increase by £24bn to £41bn, almost entirely due to increasing liabilities as corporate bond yields fell, partially offset slightly by a fall in market implied inflation.”

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