The banking sector has emerged with the best defined benefit pension deficit in the FTSE 100, research from Barnett Waddingham has found.

In the firm’s annual report into the pensions of FTSE 100 companies, it found that the top four high street banks recorded no pension deficit at all, achieving an average funding level of 111 per cent and an average surplus of nearly £15bn.

This month the overall deficit of FTSE 100 companies fell to £5bn, a £22bn decrease on the previous year, according to the research.

Barnett Waddingham associate, Martin Hooper, said: “At first glance the results look promising, as the FTSE 100 report close to surplus for the first time in recent years.

“Whilst the health of corporate pension schemes seems to be improving, it is clear that some companies still have a lot of work to do to improve their schemes’ funding levels.”

The research found that the largest pension deficits came from the oil and gas sector.

Furthermore, the funding level, on an IAS 19 accounting bases, rose by 4 per cent on the pervious year to 91 per cent.

Despite this, some companies still show a funding level below 70 per cent, while one in nine schemes funding level is below 80 per cent.

“Pressures will remain for many companies against a backdrop of greater regulatory scrutiny of funding plans and the potential for strengthening of regulatory powers,“ Hooper added.

“How companies balance the pressure to increasing funding levels against other company financial objectives will continue to be a challenge going forward.”

According to JLT’s monthly index looking at the funding position of all UK private sector DB schemes, FTSE 350 firms and all UK private sector schemes saw a deficit reduction from £47bn to £9bn and £135bn to £43bn, respectively.

Share Story: