The funding position of FTSE 350 companies’ defined benefit (DB) pension schemes moved from a £4bn deficit to a £11bn surplus in June, according to Mercer’s Pensions Risk Survey data.

The figures showed that accounting liabilities fell from £716bn to £667bn at the end of June amid further rises in corporate bond yields and a small fall in the market’s view of future inflation, which more than offset assets falling from £712bn to £678bn.

In light of the latest figures, Mercer suggested that now may be the time for pension trustees to consider their endgame, as Mercer UK Wealth Trustee Leader, Tess Page, noted that this could present an opportunity for schemes to “bank these gains”.

“For the first time in over three years, the month-end aggregate funding position on an accounting basis is expected to be showing a surplus, and yet again the main driver was bond yields,” she explained.

“Employers and trustees will be looking to control risk, and funding improvements offer a fantastic opportunity to bank these gains.

"We expect that schemes will be exploring the right actions for their circumstances - ranging from a simple change in investment strategy to securing benefits with an insurance company. Those schemes with clear journey plans will be best-placed to act quickly.”

Mercer’s Pensions Risk Survey data relates to approximately 50 per cent of all UK pension scheme liabilities, with analysis focused on pension deficits calculated using the approach companies have to adopt for their corporate accounts.

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