FTSE 350 scheme deficits rose by a modest £3bn over September after months of significant growth, which saw them almost triple since February.
Defined benefit (DB) deficits of the UK's 350 largest companies' hit £210bn on an IAS 19 accounting basis on 30 September, according to JLT Employee Benefits. This is compared to £207bn at the end of August.
The slowdown in deficit growth was helped by a fall in liabilities for the first time since February. Liabilities fell from £900bn to £899bn over last month, while assets also fell from £693bn to £689bn.
Overall, the FTSE 350 aggregate funding level stayed the same at 77%.
Across all UK private sector DB schemes, the combined deficit grew by just £1bn over last month. Liabilities stood at £1.95trn, while assets were £1.45trn. The combined funding level stayed at 74%.
The consultancy's director Charles Cowling (pictured) welcomed the slowed deficit growth, but warned trustees of challenges to come.
"This last month has seen a very slight easing of deficits from the record heights of over £500bn reported at the end of August," he said. "There seems to be no relief in sight, however, for companies with large pension schemes and their pressed trustees.
"It's a very difficult environment in which companies have to negotiate with trustees on the funding of their pension schemes. Pension schemes with an actuarial valuation are now going to find it challenging to come up with a funding plan that will keep all parties happy."
Nevertheless, deficits remain at record high levels and a number of bodies are consulting on how to deal with the growing funding problem.
The Work and Pensions Committee (WPC) has closed its inquiry into DB regulation to submissions, with some contributors suggesting schemes should employ new valuation methods.
Last week, the Financial Times reported the WPC was considering allowing trustees to suspend inflation-linked increases, known as conditional indexation.
Cowling said this was best for members, even if they do lose out on some contributions.
He said: "Inevitably there are going to be demands for some massive hikes in contributions and the question has to be asked, can UK plc afford its own pension liabilities?
"Government and regulators are facing some troublesome choices: cutting pension benefits to members or reducing guarantees attached to benefits, which in a bad scenario such as an insolvency could mean members losing benefits, is going to be very unpopular with voters.
"But forcing companies to guarantee pension promises made many years ago when market conditions were different is going to result in dividends being scrapped, share prices falling, and worse still, companies going bust."
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