Pensions Support Index December 2013

Jonathon Land, Pensions Credit Advisory Leader, introduces the December edition of the FTSE 350 Pensions Support Index and discusses how integrated risk management could be the key to improving the ability of companies to support their pension schemes.



This edition of the Pensions Support index shows further evidence that FTSE350 companies’ ability to support their defined benefit (DB) pension obligations has stalled and shows little sign of improving in the near future.

The Index, which tracks the overall level of support provided to defined benefit schemes in the FTSE350, now stands at 76 out of a possible score of 100. The Index was improving since the low of 64 in March 2009, but since December 2011 has remained relatively flat and has only improved by two points. There are few signs the situation will recover to anywhere near the 88 level achieved pre-recession in the short term.

To improve the situation pension schemes will need to take a new approach to investment which fully takes into account the combined risks for both the company and the scheme. With the Pensions making an integrated approach to risk management the focus of the new scheme funding code of practice, this edition looks at how this can be achieved.