Our report, now in its 24th year, reveals the state of FTSE 100 companies' pensions... "£150bn to go backwards"
Over the past 10 years, FTSE 100 companies have paid around £150 billion into their defined benefit pension schemes, but the continued rise in liability values (by more than 85%) has meant that the net accounting position has worsened.
What's inside Accounting for Pensions 2017?
- The accounting deficit in respect in UK pension liabilities improved from 2016 due to strong returns on assets, and a record level of contributions
- FTSE 100 companies paid four times as much in dividends in 2016 as they did in contributions
- 28 companies reduced the assumed life expectancy in their pension scheme
- Pension liabilities could reduce by £30bn if those using RPI were able to switch to CPI
- There are now no traditional final salary pensions for new recruits at FTSE 100 companies
- There is a significant DB vs DC savings gap with the amount required to provide for a typical DB pension being 55% of salary compared to DC pensions at 3% of salary under auto-enrolment
- Liabilities may be being overstated – adopting improved methods of setting accounting assumptions could reduce the combined accounting liability for FTSE 100 pensions by £25bn
- Pension schemes continue to pose a very significant potential risk for certain companies
How we can help
We provide individual and high quality actuarial advice, taking a collaborative approach between trustees, employer and advisers, to ensure a focus on good member outcomes.
We help pension scheme trustees and sponsors to determine the ultimate destination for their scheme and help them put together a plan to get there, including how to effectively manage the risks they face along the way.
We help both trustees and sponsors prepare for and deal with corporate change.