The average time to buyout for FTSE 350 defined benefit (DB) pension schemes increased to 5.4 years as of 31 July 2024, Barnett Waddingham’s DB End Gauge Index has revealed.

The group attributed the increase to a fall in average swap and bond yields, which caused liability values to increase, meaning a more cautious outlook for future investment returns.

The average time to buyout for FTSE 350 DB pension schemes has been gradually increasing over the past three months, after previously falling to the lowest level in 12 months in April.

Whilst the latest update also marks a slight year-on-year increase, as the average time to buyout for FTSE 350 DB pension schemes stood at 5.2 years in July 2023, it marks a fall on the start of the year, when the average time to buyout was 5.7 years.

The changes in the index are designed to illustrate the impacts of various factors on pension scheme journeys and demonstrate the need for the strategy to incorporate monitoring and trigger points for actions to ensure that schemes remain on course for their endgame.

The DB End Gauge is calculated using publicly available data collected from the annual accounts of the FTSE 350 companies, covering around 150 companies with DB pension arrangements.

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