Latest results by LCP’s Pensions Explorer at 31st December 2023 show that the combined IAS19 pensions surplus for the UK pension schemes of FTSE100 companies currently stands at around £70bn.  

Despite ongoing market volatility, it means that UK pensions remain in an incredibly strong financial position, with the surplus broadly unchanged both over the quarter and from the position at the start of 2023.  

The combination of persistent and stable high funding levels, coupled with low levels of ongoing risk, provides schemes with options and makes running on for longer more feasible (even if just for a few years). With this, further surplus could be generated from the pension scheme and used to support the scheme sponsor as well as potentially improve member outcomes through the application of discretionary increases. 

Jonathan Griffith, Partner at LCP, commented: “It’s great to see that robust funding levels continue to be the new normal with a significant aggregate surplus over all of 2023.  

“A new year provides new impetus for stakeholders to properly review their position, reassess their endgame destination, and reconfirm their preferred timescales. Whilst a particular endgame and timeframe may have been the desired option historically, this may have now changed. Decisions taken years ago may no longer reflect current views and may not lead to the best possible long-term outcome for all stakeholders.”