Pension Assets Decrease as Liabilities Increase

According to JLT Employee Benefits’ latest survey, pension assets decreased by 2.1% despite having a steady grip at £1.25 trillion by April.

Pension funds with the funded status dropped to 81% from 82% as of March 31 and 83% as of April 30, 2015.

“With interest rates staying stubbornly low, total pension scheme deficits are now almost breaking through the £300 billion barrier,” said Charles Cowling, director at JLT Employee Benefits, in a statement accompanying the data.

“More worryingly for companies and pension schemes with 2016 actuarial valuations, which are typically carried out around now, the pension scheme trustees are likely to calculate even higher pension deficits for the purposes of calculating future pension contributions.”

Pension liabilities are at £1.543 trillion, increasing by 1.3% per year.

FTSE 100 company pension funds saw their total deficits increase 8% to £94 billion, with the funded level dropping to 85% from 86% a month earlier. Over the year, deficits increased 11.9%, and the funded level dropped from 87%.

Overall, UK Companies have earned about 7.7% by the end of April.