Sharp rise in fully funded DB schemes in past year – Barnett Waddingham July 17

Research by Barnett Waddingham shows that around one-third of FTSE 350 DB schemes were fully funded at end-May
compared to only 11 pct a year earlier, while the average time to buyout had fallen to 5 years, a drop of 3 years from
May 2022.

The main reason for the shift was the substantial increase in bond yields over the past year, which dramatically reduced the value of DB schemes’ liabilities with the average scheme seeing a 10 pct improvement in its buyout funding level.. It added that there had been a significant decline in FTSE 350 DB schemes’ assets and liabilities with approximate reductions of some £160bn and £250bn respectively.

It also noted that despite an overall position which appears positive, some individual schemes have had different experiences
and the buyout position over the past year for around 12 pct of the schemes had remained unchanged or worsened.

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