The total deficit of defined benefit (DB) pension schemes in FTSE 250 organisations has reached £11 billion, according to research by JLT Employee Benefits.
Its FTSE 250 and their pension disclosures half-yearly report, which analyses data of annual reports for years ending on or before 31 December 2015 and published by 31 March 2016, also found that only 11 organisations within the FTSE 250 provide DB benefits to a significant number of their employees, with 48 organisations giving these benefits to just a handful of staff.
The research also found that deficit funding fell from £1.4 billion in 2014 to £1.22 billion last year. John Laing Group contributed £126 million to its deficit, while 35 other organisations also reported significant deficit funding contributions.
The average pension scheme asset allocation to bonds is 55%, an increase on last year’s recorded 52%. Across 11 organisations, pension scheme asset allocation to bonds changed by more than 10%.
In terms of pension liabilities, 19 organisations in the FTSE 250 have total disclosed pension liabilities greater than their equity market value.
Over the past 12 months, total disclosed pension liabilities across the FTSE 250 increased from £71 billion to £86 billion, with 27 organisations disclosing pension liabilities of more than £1 billion. In total, 153 organisations disclosed pension liabilities of less than £100 million, of which 118 organisations have no DB pension liabilities.
37 organisations reported a pension surplus, while 95 disclosed pension deficits.
Charles Cowling (pictured), director at JLT Employee Benefits, said: “Ibstock is the most recent example of the continuing trend for DB scheme closure among the FTSE 250, having announced a consultation with staff to close its DB scheme to future accrual for all active members.
“The phrase ‘managed decline’ has become synonymous with the gradual phasing out of DB pensions and unfortunately this narrative may continue. It now appears likely that DB pension accrual in the FTSE 250 will be almost completely stopped by the end of the year.”
