The combined IAS19 funding level for the defined benefit (DB) UK pension schemes of FTSE100 companies remained strong at over £50bn amid recent government and regulatory announcements on DB plans, LCP’s Pensions Explorer has revealed.

According to LCP, the funding level was 118 per cent at the end of May 2025.

LCP stated that over the recent weeks, there has been a "flurry" of activity and announcements from the Department for Work and Pensions and The Pensions Regulator (TPR) that intend to build on these funding levels.

On 29 May, the UK government responded to its consultation issued last year on options for DB pension schemes, which, under the government plans, will allow trustees to modify their scheme rules to provide for surplus sharing to members and sponsors from its DB scheme. 

Following this announcement, TPR issued new guidance for trustees and sponsors on endgame options, which is aimed at encouraging schemes to actively consider their endgame and, where appropriate, to develop a policy on the potential future use of surplus.  

LCP said it expects this to broaden endgame discussions and options available to schemes, sponsors, and members, arguing that it is “clear” that endgame strategy should be at the top of trustees’ and sponsors’ pension agendas.

However, it warned that with more choice comes more opportunities and risks, emphasising the importance for all parties to proactively work their way through the new rules and guidance to deliver the best outcomes tailored specifically to each scheme. 

“Another strong year-end of accounting results, coupled with the joined-up rhetoric from the government and regulator about surplus, continues to suggest that wide-ranging discussions around endgame are here to stay,” LCP consultant and part of the endgame innovation team, Aaron Chaderton, said.

“An increase in flexibility and choice should mean trustees and sponsors are able to actively consider the right endgame for them rather than being constrained by rules.”  

Adding to this, LCP associate consultant and part of the endgame innovation team, Harry Fitchet, said the clarity provided by the government on dealing with surplus would be “encouraging” for schemes exploring their endgame options.

He added that it would also give confidence to sponsors who may have previously been concerned about trapped surpluses. 

However, he acknowledged that for many sponsors, “the right thing” will be to transfer the pension risk away from the balance sheet in a traditional insurance or superfund transaction.

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