Report: FTSE 350 Pensions Analysis 2017

This analysis from Hymans Robertson puts the defined benefit (DB) pension schemes of the FTSE 350 in the context of the businesses that support them, and looks ahead to the key themes emerging for DB pensions.

Key findings:

• Most companies are able to support their pension schemes, with 85 per cent of companies able to pay off their IAS19 deficit with less than six months’ earnings.
• The Pensions Regulator (TPR) expects annual deficit contributions to increase rather than recovery periods to be pushed out further. However, the report warns that this focus on deficit contributions is simplistic, and could lead to unintended consequences.
• The pressure to increase deficit contributions will lead to companies taking more action to reduce costs, finds the report. Around 55 per cent of the FTSE 350 have already closed their DB schemes to future accrual.

2017 was another high-profile year for DB pensions, with the resolution of the BHS and British Steel cases causing TPR to review the way it operates. As a result, it is thought that TPR will be more proactive and intervene more frequently.