The UK's 5,600 defined benefit (DB) schemes saw their funding positions improve by one percentage point over the course of November, according to JLT Employee Benefits.
The consultancy's monthly index, published today (3 December), showed the IAS 19 funding position had been improved to 96.9% as of 30 November, rising from 95.9% at the end of October. The deficit fell from £66bn to £48bn over the month.
Assets of all UK private sector DB schemes were recorded at £1,514bn with liabilities amounting to £1,562bn.
Across FTSE 100 companies, assets totalled £647bn, while liabilities were at £648bn, leading to a funding level of 99.8%. And, for FTSE 350 companies, assets were estimated at £731bn, with liabilities recorded at £737bn and a funding level of 99.2%.
All funding level percentages have increased over the past year, the consultancy said, while all deficit levels were down significantly.
JLT chief actuary Charles Cowling said liabilities were likely to grow following a recent High Court ruling on guaranteed minimum pension (GMP) equalisation.
"The Lloyds Banking Group case on GMP equalisation continues to keep the pensions industry awake at night. The industry is slowly coming to terms with the scale of the task ahead," he said.
"Pension schemes are going to have to recalculate benefits for millions of members, demanding fiendishly complicated calculations that will incur huge additional costs and resources."
He added: "This blow has come at a time when UK pension schemes and indeed, the wider economy, are facing a looming front of uncertainty as the Brexit deadline draws ever nearer. At this stage it is impossible to know what impact Brexit will have."
Gilts plus measure
On a gilts plus measure, however, scheme funding positions fell by 20 basis points (bps), PwC's Skyval index said.
The consultancy recorded the aggregate deficit at £230bn at the end of November, the same level as at the end of October. However, the funding level fell as liabilities grew and assets decreased over the month.
Chief actuary Steven Dicker said: "While the deficit of the UK pension schemes remained unchanged over November, this masks a drop of some £20bn in both assets and liabilities, which has been driven predominantly by a rise in gilt yields over the month.
"The index is based on the most widely used approach by scheme actuaries for setting discount rates - gilt yields plus a margin - and these figures show the inherent volatility of this method from month to month."
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