DB Pensions – End-July 2011 PPF 7800 deficit

11 August 2011
The Pension Protection Fund produces a monthly index update (the August release has data taken as at 31 July) of the estimated funding position of the DB schemes potentially eligible for entry into the Fund.

Total scheme deficits showed an increase from £8.3bn as at end June to £67.3bn as at end July. The liability calculations are worked on a s179 basis which approximates to the cost of having an insurance company take on the schemes’ payments but at the PPF’s level of benefit coverage.

The change in deficit is only partly due to asset falls : recall that August has seen significant subsequent market weakness : but more to do with the underlying strength in gilt yields. This would be expected to continue in August’s data as well.

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