The Financial Conduct Authority (FCA) Pension Plan had a surplus of £24m at 31 March 2020, compared with a deficit of £83.7m reported at the same point in 2019, as liabilities decreased from £886.7m to £805.3m.

The watchdog’s financial results for the year showed that this change in the defined benefit (DB) scheme’s liabilities was driven by actuarial gains of £77.3m, a contrast to the actuarial losses of £35.4m registered in the previous year.

A rise in asset values from £803m to £829.3m also contributed to the scheme swinging into the green.

The plan closed to future benefit accrual from 31 March 2010, with a recovery plan put in place following the scheme specific valuation as at 31 March 2016 and required an annual deficit contribution to be paid over ten years with the aim of reducing the plan deficit by 31 March 2027.

FCA's deficit contribution in the year was £24.8m, down from £29.0m in 2019, and the Financial Ombudsman Service's deficit contribution remained unchanged at £1.0m.

Following a triennial valuation conducted during the year, the FCA recognised a net asset of £20.7m in respect of the final salary section of the scheme at 31 March 2020, compared with a net deficit of £87.1m 12 months prior.

Looking at its impact on the pensions sector as a whole, the regulator said data from its 2020 Financial Lives research had found that 74 per cent of UK adults had a private pension, up from 66 per cent in 2017.

“The government’s 2015 pensions freedoms, and the shift from DB to defined contribution pensions, have given consumers more responsibility for complex investment decisions. With the closure of DB schemes, these investments are becoming the most significant part of consumers’ total financial wealth,” said the regulator.

The FCA’s specific actions throughout the year included issuing guidance to encourage effective competition in non-workplace pensions, the continuation of the ScamSmart campaign and preparing implementation of retirement outcome review measures for a February 2021 launch.

Looking ahead, the FCA said its key pension-related priorities would be improving outcomes for DB transfers and working to create a framework for independent governance committees to assess value for money of the workplace schemes they oversee.

FCA chair, Charles Randell, said: “We were prepared for change and challenge in 2019/20, and – even before the coronavirus pandemic – the year certainly brought both. Changes we achieved include the extension of the senior managers and certification regime, to drive change in the culture of financial firms; and changes to the rules to prevent harm in high-cost consumer credit products such as rent-to-own.

“Challenges we continue to tackle include unfair pricing in general insurance; and tackling the internet marketing of unsuitable high-risk and scam investments, which cause such misery to those who sign up.

“Alongside all this, and the daily challenge of supervising some 60,000 firms, we have been preparing for a range of outcomes in the UK’s withdrawal from the European Union and its new relationship with the EU.”

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