Barclays pension surplus rises to £1.8bn

The Barclays Group's IAS 19 pension surplus across all its schemes increased by £300m during 2019 to £1.8bn, as of 31 December 2019.

Its final results report revealed that it had risen from the £1.5bn surplus posted at the end of 2018 due to higher than assumed asset returns, payment of deficit reduction contributions, updated mortality assumptions and lower than expected inflation.

These factors were partially offset by a decrease in the discount rate.

Barclays paid a total of £500m in deficit reduction contributions, split into two £250m payments in April and September 2019.

The firm operates multiple schemes, the largest of which is the UKRF, a scheme made up of 10 sections, including DB, DC and hybrid parts, and covers 220,000 members.

At its latest triennial actuarial valuation on 30 September 2019 found that UKRF had a funding deficit of £2.3bn and a funding level of 94 per cent.

This is more than half of the funding deficit at the previous triennial valuation, when it stood at £7.9bn.

Barclays said that the fall in deficit over the three years was driven by the payment of deficit reduction contributions and changes to mortality assumptions.

The report stated: “Barclays Bank PLC, as the sponsoring entity and the UKRF trustee have agreed a revised statement of funding principles, schedule of contributions, and recovery plan to seek to eliminate the funding deficit.

“The key differences between the funding and accounting assumptions are a different approach to setting the discount rate and a more conservative longevity assumption for funding.”

The firm plans to reduce the deficit reduction contributions from the agreed level of £1bn per year from 2021 to £700m in 2021 then around £300m in 2022 and 2023.

Barclay's DB pension fund assets increased from £1.3bn at the end of 2018, to £2bn in September 2019 before falling to £1.6bn at the end of 2019.

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