The total expected IAS19 surplus presently stands at £130bn, according to a new analysis of FTSE100 pension positions by LCP’s Pensions Explorer at the end of 2022.
Scheme funding levels remain strong and have increased by more than double since 2022, albeit having declined from their record highs of the previous several quarters.
The fallout from September’s mini-budget resulted in financial losses for some schemes due to cutbacks in hedging levels, while many more have surpassed financing goals and are currently in the best financial shape to date.
LCP partner Jonathan Griffith says: “Whilst we are seeing funding levels dipping below the record levels over the autumn, it’s clear that for the majority there has still been a huge improvement in funding levels over 2022. This has shifted the focus for many companies towards surplus management and generating value from future pensions actions.
“Pension scheme sponsors have waited 20 years to be in the position they find themselves in today – 2023 is going to be a pivotal year for ensuring sponsors’ objectives are fully reflected throughout the next stages, whether that be achieving optimal terms on settling liabilities or running the scheme on to generate value.”