The Santander defined benefit (DB) pension scheme surplus has fallen by approximately £339m, to £389m in 2019 (£728m in 2018).

The bank's year end financial report revealed a 146 per cent increase in its' scheme liabilities, up to £280m as at 31 December 2019, compared to £114m in 2018.

Meanwhile, assets for the group decreased by 21 per cent to £669m, compared to £842m in 2018.

The shifts in the schemes’ liabilities and assets reflected a broader decrease in the overall accounting surplus of the scheme, and was attributed to a decrease in corporate bond yields, resulting in a higher value being placed on the liabilities.

This was, however, partially offset by asset growth, which was in turn driven by the decrease in corporate bond yields.

The group's main DB scheme, which is closed to new members, is the Santander (UK) Group Pension Scheme, which saw a 2 per cent dip in current employee membership over the past year, from 13 per cent to 11 per cent.

Following a review by the trustee as part of the 2019 triennial valuation, a new methodology for setting demographic assumptions was also established to “better represent current expectations”.

This in turn saw a further negative impact of £44m on the accounting surplus.

However, the group also benefited from a drop in DB operating expenses, primarily driven by an increase in net interest income from £7m in 2018 to £23m.

This subsequently saw the schemes total DB operating costs fall from £83m in 2018, to just £20m in 2019.

Santander also operates a number of defined contribution (DC) pension plans, with the majority of employees members of Willis Towers Watson's DC master trust, LifeSight.

The groups DC schemes carried an expense of £66m, slightly lower than in 2018 (£67m).

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