The average time to buyout for FTSE350 companies' defined benefit (DB) pension schemes rose to the highest level in 2023 in December, increasing from 5.3 years to 5.7 years, Barnett Waddingham’s DB End Gauge Index has revealed.

The group attributed the slowing in buyout times to a decrease in average swap rates and bond yields over the month.

Commenting on the findings, Barnett Waddingham principal, Lewys Curteis, said: “There was a notable increase in the DB End Gauge index during December 2023, as aggregate liability values increased by around 10 per cent following a significant decrease in bond yields over the month.

“Although average funding positions remain very strong, this does illustrate the risk that remains on the table for both DB scheme sponsors and trustees."

Curteis suggested that this could also act as a good reminder of the importance of monitoring funding levels and ensuring investment strategies appropriately reflect funding objectives and appetite for risk.

“Having a clear plan in place to re-calibrate investment strategies as funding levels change will allow opportunities to be captured," he added.

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