Pensions - Articles - JLT Pension Funding Index Sept 2014

 JLT Employee Benefits (JLT) has updated its monthly index, showing the funding position of all UK private sector defined benefit (DB) pension schemes under the standard accounting measure (IAS19) used in company reports and accounts.
 
 As at 30 September 2014, JLT estimates the total DB pension scheme funding position as follows:

 For comparison, the corresponding figures as at 30 September 2013 are as follows:

 Charles Cowling, Director, JLT Employee Benefits, comments: “There has been an easing in pension scheme deficits from last month due to a slight rise in bond yields, but year on year the position has still worsened due to the historic low level of bond yields we are currently seeing.”

 “There has been some hope that interest rate rises would be imminent and help relieve pension scheme deficits. But like the desert mirage, just as relief seems near at hand, the promise of higher interest rates leading to lower deficits and maybe even surpluses proves illusory.

 “The No vote in the Scottish independence referendum was at least some good news for all those pension schemes with members both in Scotland and the rest of the UK. However, the implications of “devo-max” or even more limited fiscal autonomy for Scotland could still be very serious for UK pension schemes and lead to significant additional administrative complications. This will not be welcomed by companies and pension schemes that already have to deal with the most complicated pension system in the world.”