Defined benefit (DB) pension scheme funding levels remain in an “incredibly strong” financial position going into the new year, LCP has stated.

The consultancy argued that schemes' continued high funding position as they enter 2024 provided new impetus to review their strategies.

LCP’s latest Pensions Explorer showed that the combined IAS19 pension surplus for FTSE 100 companies’ DB schemes stood at £70bn at the end of 2023.

The level of surplus was broadly unchanged over both the fourth quarter of 2023 and the year as a whole.

According to LCP, the combination of persistent and stable high funding levels, alongside low levels of ongoing risk, provided schemes with options and made running on for longer more feasible.

With this, further surplus could be generated from the pension scheme and used to support the scheme sponsor, as well as potentially improving member outcomes through the application of discretionary increases, the consultancy said.

Commenting on the update, LCP partner, Jonathan Griffith, said: “It’s great to see that robust funding levels continue to be the new normal with a significant aggregate surplus over all of 2023.

“A new year provides new impetus for stakeholders to properly review their position, reassess their endgame destination, and reconfirm their preferred timescales.

“Whilst a particular endgame and timeframe may have been the desired option historically, this may have now changed.

“Decisions taken years ago may no longer reflect current views and may not lead to the best possible long-term outcome for all stakeholders.”

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