FTSE100 pension schemes are in a strong position, with a combined IAS19 surplus of more than £55bn at the end of September, LCP’s latest pension explorer has revealed.

The consultancy’s most recent analysis showed aggregate funding levels of 120 per cent, although individual schemes’ positions varied significantly, ranging from around 90 per cent to over 150 per cent.

LCP said this highlighted the need for trustees to focus on bespoke endgame strategies that reflect scheme-specific circumstances and objectives, rather than adopting a “one size fits all” approach or following broader market trends.

The passage of the 2025 Pension Schemes Bill is expected to create more flexibility around defined benefit (DB) endgames, surplus use and superfunds.

Indeed, LCP noted that Clara’s four completed transactions have already demonstrated the viability of the superfund model, with further entrants anticipated and proposed easements to gateway tests creating new options for underfunded schemes.

For schemes already fully funded on a buyout basis, LCP noted a growing appetite to utilise surpluses to provide additional benefits, including ongoing defined contribution (DC) contributions for current workforces.

LCP partner and head of endgame innovation, Jonathan Griffith, commented on the findings: “With robust funding levels and over £55bn in surplus across FTSE100 schemes, the conversation has firmly shifted from funding to futureproofing and delivering value.

“We’ve been able to help trustees and pension scheme sponsors use the tools, flexibility, and market innovation to turn strong funding into stronger outcomes,” he added.

The update comes as DB pension schemes recorded a record aggregate surplus of £223bn at the end of August, according to analysis from XPS Group.

The latest figures marked an £11bn increase from July’s total and a £50bn rise compared to the same point last year.

Meanwhile, earlier this month, PwC partner, Atul del Tasso-Dhupelia, stressed that the covenant of DB pension schemes is the ‘underpin’ to any surplus release strategy, describing it as “the ultimate backstop” if things go wrong or not as expected during surplus release.

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