The combined IAS19 funding level for the defined benefit (DB) UK pension schemes of FTSE100 companies remained "strong" at over £50bn, with a funding level of around 118 per cent funding level at the end of June, LCP's latest Pensions Explorer has revealed.

The firm explained that while the total funding amount appears strong, the funding levels for individual companies vary with some schemes funded at approximately 90 per cent and others exceeding 150 per cent.

The firm said that this demonstrated the need for all schemes to consider the endgame strategy that is right for their own specific circumstances and objectives rather than follow any one-size-fits-all solution or wider market trends. 

The update comes after Clara’s announcement of its fourth superfund transaction with the Church Mission Society Pension Scheme in mid-June.

LCP said that the transaction, which is Clara’s smallest transaction to date at £55m, opens up a potential new endgame option for smaller-sized pension schemes who would otherwise have more limited options in this space. 

LCP consultant and part of the endgame innovation team, Aaron Chaderton, said that with Clara opening up to the smaller end of the market, it is “great to see” schemes below £100m having a broader range of endgame options.

Chaderton added that the competitiveness of the insurance market at that level, combined with the recent surplus announcement, means trustees across the board have viable options to consider and can better tailor their decisions to their own specific circumstances.

Adding to this, LCP associate consultant and part of the endgame innovation team, Harry Fitchet, said: “Trustees and sponsors need to be alive to the evolving endgame opportunities and risks that could impact their schemes.

“The latest Clara announcement is another clear demonstration of innovation in this rapidly developing area.”

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