The average time for FTSE 350 companies’ defined benefit (DB) pension schemes to reach buyout fell to the lowest level in 12 months in April, dropping from 5.2 years at the end of March to 4.7 years at the end of April, analysis from Barnett Waddingham has revealed.

The DB End Gauge index showed that the average time to reach buyout fell following a further improvement in funding levels.

Commenting on the fall, Barnett Waddingham principal, Lewys Curteis, said: “DB pension funding levels have remained remarkably resilient over the last year, with no sign of any reversal in the funding gains experienced during the 2022 calendar year.

“A further rise in swap and bond yields towards the end of April pushed our DB End Gauge index to its lowest level in 12 months, illustrating the strength of average DB funding positions.”

He said that this relative stability in funding levels provides a good opportunity to review DB scheme funding and investment strategies to ensure they remain appropriate.

However, Curteis cautioned that with the general election scheduled for 4 July, sponsoring companies should “closely monitor” the development of the government’s DB pension reform agenda and the potential implications for DB strategy decisions.

The DB End Gauge is calculated using publicly available data collected from the annual accounts of the FTSE 350 companies. It covers around 150 companies with DB pension arrangements and is calculated as the average of the estimated time to reach buyout for each scheme.

---