The aggregate funding position of FTSE 350 companies’ defined benefit (DB) pension schemes fell by £10bn in November 2023, according to Mercer’s latest Pensions Risk Survey.

The tracker also recorded a "slight decrease" in the aggregate funding level across company accounts since the end of October 2023, reaching 110 per cent at the end of November 2023.

Mercer highlighted the latest update as demonstration that the Chancellor's Autumn Statement did not have a material impact on DB funding positions, despite including a number of key proposals around DB pension scheme surpluses.

This included changes to the tax rate on DB pension surpluses could benefit those currently in the process of buyout, which Mercer partner and UK wealth corporate leader, Simon Turner, suggested would be "welcomed by companies who are close to winding up pension schemes and who have ready access to surplus.”

However, Turner pointed out that many companies disclosing a positive pension scheme balance sheet position still face strict rules on accessing any surplus, arguing that the Chancellor did not take the opportunity to address the wider challenges for sponsors and trustees that might wish to access any surplus.

Despite this, he agreed that the surplus tax cut could influence longer term thinking on how to manage pension schemes, particularly with a further consultation on plans to relax DB surplus rules on the horizon.

“Some of the restrictions are in place for the right reasons to protect employees, but if used correctly and with the right oversight assets could potentially be invested in productive assets to aid UK growth," Turner stated.

“This winter’s consultation is the bigger piece of the surplus puzzle. It is something companies will be keeping a close eye on in the coming months and we look forward to contributing to the consultation.”

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