PPF 7800 DB Pension Scheme Funding Ratio – May 2013
12 June 2013
The Pension Protection Fund produces a monthly index update (this month’s release has data taken as at end-May 2013) of the estimated funding position of the defined benefit schemes which would be potentially eligible for entry into the Fund.
May saw a significant improvement in universe funding levels, despite growth asset performance being largely flat – by far the main contributor was an increase in term interest rates (by way of an example, 10 year gilt yields increased by some 30bp over the month). There was a sharp drop in total scheme deficit from £256.6bn in April to £185.5bn in May with a corresponding improvement in s179 funding ratio to 85.9% from 81.5%.
Such moves are certainly unusual, but not unheard of: when considering a deficit as the difference between two large and volatile figures, it is inevitable that it will itself exhibit significant volatility.
Report and analysis is provided by the PPF on their website