DB funding: A call to action
DB funding: A call to action

Pension scheme funding is being severely affected by current economic conditions, not least by historically low gilt yields used to calculate scheme liabilities.

Given the current conditions, schemes need more leeway to counter the impact of Quantitative Easing (QE) and to free up funds for investment in the economy. It is proposed that schemes are allowed to add a small margin to their discount rate to help them cope with the impact QE – even a relatively cautious uplift of 0.5% would reduce the pension fund deficits of FTSE 350 companies going through their funding valuations by 40% to 50%, or over £20bn.

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