The general election should not mean schemes “pause” work on their endgame planning, LCP has warned, after its analysis showed that the combined IAS19 surplus of FTSE 100 defined benefit (DB) pension schemes remained "strong" at around £60bn as of 30 June.

LCP said that this magnitude of surplus presents many schemes, and the industry, with some "exciting opportunities", noting that pension schemes have options available in the current regulatory regime that can improve outcomes and, while continuing to protect member benefits, turn the scheme into a "real asset".

Whilst LCP noted that the general election may mean uncertainty on many issues, it said that it is "clear" that there is alignment on generating positive investment from pension schemes.

In particular, the firm noted that Labour's manifesto said that the party will “act to increase investment from pension funds in UK markets” and to “adopt reforms to ensure that workplace pension schemes take advantage of consolidation and scale, to deliver better returns for UK savers and greater productive investment for UK PLC”.

In addition, LCP said that pension schemes wishing to take action now are supported by this direction of travel from the government.

The firm also pointed out that its recent longevity report noted that new mortality projections released in April would be expected, once adopted, to boost pension surpluses even further.

LCP partner and head of endgame innovation, Jonathan Griffith, stated: “The general election should not mean schemes pause work on their endgame planning.

“The strong funding levels are persisting, and we are now seeing more schemes take action, building flexible strategies that protect members and meet their objectives in changing market and regulatory conditions.”

Adding to this LCP consultant and part of the endgame innovation team, Aaron Chaderton, said: “It is great that the industry as a whole is talking about innovative ways to make scheme endgames as beneficial as possible.

“Innovation and being able to access better outcomes for our clients is central to what we’re doing.”

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