FTSE 350 pension schemes remain relatively well funded, according to Mercer.
The human resources consultancy says the schemes have an aggregate funding level of 98% and a £9bn deficit.
The FTSE 100 funding level also stands at 98% and has a £6bn deficit, compared to a £30bn deficit in August.
John Hawkins, principal in Mercer's financial strategy group, says: "We are continuing to see efforts by sponsoring employers to reduce the risk of pension deficits while, at the same time, there has been a growth in the options available for transferring risk.
"Any company adopting a de-risking strategy by switching from equity holdings into liability matching bonds at the end of June could potentially have improved their position significantly.
"This demonstrates the benefits of de-risking to scheme sponsors, in terms of funding and competitive positioning, and to members in terms of benefit security. It highlights the need for pension schemes to be prepared to capitalise on opportunities for de-risking as and when they arise.
"The traditional buy-out market continues to be top of mind for most companies when considering a full de-risking solution. But a number of other options are either available or are being developed, and these could also be considered.
"These include the ability to hedge longevity risk with the use of longevity swaps and the sale of pension schemes to new sponsors. As they are not regulated like insurers, these new sponsors can potentially offer competitive pricing compared to traditional buy-outs.”
To comment on this story contact:
Tel: 020 7034 2679
E-mail: [email protected]
Will assess regulation
Client was warned of risk
Megan Butler keynote speech at Women in Finance summit
Market anticipates a May hike
Newly-formed Mobius Capital Partners