Press Releases

Encouraging a mass of transfers would be wrong for the majority of DB scheme members and worsen the funding position further for many schemes.

The impact of low yields won’t be felt equally by all schemes – it depends on the interest rate hedges they had in place.

More schemes closing to new entrants is inevitable, as the cost of providing a DB pension has now risen to 50% of pay.

Hymans Robertson, the independent pensions, benefits and risk consultancy, has appointed Sarah Steel as a Senior New Business Consultant. Sarah joins the firm from Aon Hewitt where she was Sales Director for their Employee Benefits Business.

The combined deficit of UK defined benefit (DB) pension schemes has hit £950bn for the first time ever. This is off the back of further drops in yields as the Bank of England attempts to roll out its package of Quantitative Easing. The BoE failed to buy the gilts it hoped to yesterday as investors seem to be unwilling to part with their longer-dated bonds. In light of that we could see the situation deteriorate further over the coming days. 

The combined liabilities of UK Defined Benefit (DB) pension schemes have risen by £70bn as a direct consequence of the Bank of England’s decision to cut interest rates to 0.25% and introduce a new £60bn programme of QE. 

Analysis from Hymans Robertson has shown an increase of 10% of Defined Contribution (DC) savers are now unlikely to meet their retirement income target as a result of Brexit. The latest figures from Hymans’ analysis of over 500,000 DC savers show that 75% of savers are now set to miss their target.

Key statistics: Cost of longevity risk increases by 50%, Low interest rates push liabilities up 50% over past 12 years, The risk of yields staying low or getting lower for longer has increased following Brexit and Total Defined Benefit pension liabilities now stand at £2.3 trillion

UK defined benefit (DB) pensions shortfall driven by record lows in gilt yields

Our response to British Steel Pension Scheme's public consultation.

Figures released from Hymans Robertson, the leading pensions and benefits consultancy, show that as at Thursday last week the collective UK DB pension deficit had reached £850bn, increasing by £120bn over a 6 week period. Since then it has bounced back by £30bn, thanks to yesterday’s rally in equities and an improvement in yields. This corresponds with shifting sentiments in the run up to Thursday’s Brexit referendum.

A third of CFOs** recognise their Defined Benefit (DB) schemes are now paying out more in pension payments than received in contributions. Research* shows 50% of FTSE350 DB schemes are now in this situation.