Report: Putting pensions in context

Hymans Robertson’s latest FTSE 350 pensions analysis report explores two strong themes affecting defined benefit (DB) pensions over the next year.

Key findings

  • Although 44 per cent of schemes are now in surplus, companies must not be complacent. Those with valuations on the horizon may need to increase deficit contributions or implement additional risk management and contingency plans.
  • 2018 has also been a record breaking year for the risk transfer market. New consolidators in this market will allow a significant minority of schemes to reduce pension risk at a lower cost than buy-out.
  • The report finds that nine per cent could transfer their pension scheme into a commercial consolidator, achieving a clean break for the employer, with a cash top-up of less than one month’s earnings.
  • The analysis shows the proportion of companies that could take immediate action to benefit from a range of consolidation options including buy-out, transferring to a commercial consolidator, merging DB schemes and transferring to a DB Master Trust.

This report highlights that most companies are well able to support their pension schemes, with 90 per cent of companies able to pay off their IAS19 deficit with less than six months’ earnings.